Ep 46: How Delayed Gratification Can Help Your Finances
RetirementOn This Episode
Delayed gratification is a difficult skill to master and that’s just as true with financial matters as it is in the other areas of your life. Let’s talk about some instances where you might be faced with a choice of being satisfied now or satisfied later.
Takeaways
On today’s Saving With Silverman podcast, Mark Silverman CFP® shares some helpful hints for mastering delayed gratification so it can help you financially in the future.
Getting some relief on the household budget vs. getting the 401k match
When the budget is tight, it’s tempting to forego contributing to your 401k so that you can bring more money home. Usually, you tell yourself that you’ll start the 401k contributions once you’re making more money.
But the matching funds that your employer contributes to your 401k could be the best possible return you can get on an investment. The money that you leave on the table by not contributing to your 401k and taking advantage of the match can amount to a huge sum of money that could have been yours after years of compounding.
The goal is to max out your 401k the best you can.
Getting a tax deduction now vs. better tax planning for the future
Contributing to traditional IRAs, 401Ks, and other tax-deferred accounts is awfully convenient at the time that you do it because it lowers your tax bill for that year.
But most retirees today are looking back and wishing that they’d contributed more to a Roth because they now have a tax time bomb on their hands with all of their retirement income being fully taxable.
Ask yourself, would you rather save a dollar today or $3 in the future?
Starting Social Security at 62 vs. starting later and getting a bigger benefit
After 40 years of working and contributing to Social Security, it’s very tempting to start getting that monthly check as early as possible. But your benefit will be significantly reduced if you do that, so this approach usually isn’t ideal unless you’re planning to die soon. More often than not, you’d be better off waiting and getting a bigger monthly check.
Listen to the full episode or use the timestamps to jump to a specific section. Thanks for listening! We’ll be back for another show every other Thursday.
Like most people, including myself, the only pension we have is Social Security, so why not maximize it?
- Mark Silverman, CFP®
The Layout
Listen to the entire episode to hear more. Click on the timestamps below to skip to a particular segment.
1:00 – Budget vs. 401k match
2:26 – Deduction vs. tax planning
4:18 – Social Security
Don't forget to subscribe to the show on your favorite app!