Erica and I met with a financial planner this morning at her school. The public sector offers a 403b to its employees as a means to retirement planning. The 403b is the equivalent of a 401K in the business sector. Basically, you set aside money each pay period and then the company you work for matches that amount. 403b’s and 401k’s are beneficial for retirement because the money you and your employer invest grows tax free while it sits in those accounts. The tax man eventually catches up when you go to pull the money out at 55, but it still beats paying taxes on money you make each time you sell a stock. The amount a company will contribute varies. Erica’s school corp will match $600 a year while the company I work for will match $3000 a year plus another 50% match on an additional $3000.

I’m always a little leary of taking financial advice from just anyone. Most people only talk finances will salespeople who make their money off of commissions, not off of your success. The guy we met with today just charges a flat fee up front with no fees to move the money around once it is set aside (very important: ask if there are any fees to move your money around if you want to self-manage your finances). I would also recommend finding someone who does not work exclusively with one brokerage firm. Instead, look for a financial broker who deals with a plethora of annuities and can guide you to the one that is the best fit for you (not the one that brings them the highest commission). Personally, I use Rick Deyo of Faith Financial Planners. I like his service because he meets the criteria I laid out above and he can screen stocks and mutual funds for companies that support issues I do not agree with (ie tobacco, pornography, gambling, etc…).

At the very least, try to max out your company’s offer so that you take advantage of their help. And start now. Develop the habit of automaticallly withdrawling funds from you paycheck to set aside for investment. A little now (I’m talking $20-50 a pay) will go a long way toward retirement with 30 years of compound interest to your advantage. Check out the book The Wealthy Barber for more sound and simple financial advice to get started.