Congratulations, You're Graduating College! Now Let's Talk About Your Retirement

Congratulations! You’re graduating from college.

Now let’s talk about your retirement.

• 4 out of 5 Households have less than 1x their annual

salary saved.

• For 55-64 year olds, 3 out of 8 people have more than

1x their annual salary saved.

• And only 1 out of 25 have more than 4x saved.

• On average they’ll need 22x their annual salary saved.

Your greatest asset is time!

Start saving as soon and as much as possible!

401k• Defined contribution plan• Your retirement is up to you and how much you save.• Enroll!• Increase the amount you save every year.• Get to your employer’s matching level as quick as possible. It’s free

money!• “Save More Tomorrow” from Richard Thaler’s book Nudge

IRA vs Roth IRA• IRA (aka Traditional IRA)• Pre-tax contributions. Used to lower current tax bill.• No capital gains tax.• Money must be taken out each year starting at 70.5 years old.

• This is taxed at current income bracket at time of withdrawal

• Roth IRA• After tax contribution. Does not lower current taxable income.• No capital gains tax.• No mandatory withdrawals.• Money withdrawn is not taxed• Better option if you want to buy a house

Saving Yourself from Yourself

The average investor has underperformed every asset class for the last 20 years.

Performance chasing• Buy what is going up• Sell what is going down• Right before reversion to the mean

It looks something like this...

Behavioral Finance Books to Change This

• Your Money and Your Brain by Jason Zweig

• Easy to read and it focuses on the physical structures in our brains and how

they lead us to do the wrong thing when it comes to money.

• Thinking, Fast and Slow by Daniel Kahneman.

• The bible of behavioral finance. It gets into the battle between our fast,

reactive system 1 thinking and our slow, rational system 2 thinking. The big

thing affecting us is “Loss Aversion”.

Create an Investment Plan• Technology and competition has made the entrance cost so low

everyone has access to a well diversified portfolio now.• “Robo-Advisors”• Gen X, Y, & Millennial focused financial advisors with affordable fee

schedules.• I’m always here to help.

Stick to the Plan!

• Make saving regular and automatic. Pay yourself first.

• Rebalance on a consistent schedule.

• Ignore market news. It’ll trigger emotional decision making.

• Review the plan every few years and at milestones.

• If you can’t, then hire someone.

Budget

• Mint

• Level App

• Track your spending. You can’t improve what you don’t measure.

Avoid Debt

• Saving and investing creates positive compounding effect.

• Wealth building.

• Credit card debt is negative compounding.

• Wealth destroying.

• Pay off student loans as quick as possible.

• Side hustles to make extra money.

• www.budgetsaresexy.com for 60+ list of side hustles

I’m always here to helpI’ll help you with anything financial that pops up over your life.

Personal Email: gjbusch@yahoo.comWork Email: gbusch@amminvest.comOffice Phone: (858) 755-0909Cell Phone: (858) 945-8092