Don’t Stress, Just Invest: It’s time to set up your investments and get on with your life by Alec Renehan

STEP 1
Get paid

It pays (literally) to max out
retirement accounts

Governments around the world are worried that we’re not going to have
enough money for retirement. The generation of workers who are retiring
today are the first to have moved from a ‘defined benefits’ world to a world
of ‘defined contributions’.
Defined benefits are when the government or your company will pay you
a set amount (e.g. a company pension).
Defined contributions are when your employer will contribute a set
amount to your retirement account while you’re working.
Governments are doing everything they can to encourage us to save and
invest more for our retirement. And it pays (literally) to take advantage.
Perhaps the most generous plan we’ve come across is the Lifetime ISA in
the United Kingdom. Britons aged between 18 and 39 can contribute up to
£4,000 a year and the government will match 25% of it. So if you’re in the
United Kingdom, you could be getting £1,000 a year from the government
added to your retirement savings.
In the United States, it’s not the government who pays but often
employers will offer matching contributions. If your employer is offering a
50% match, for every $1 you add to your 401(k) they’ll add 50 cents.
Even if you can’t get the government or your employer to chip in, the tax
advantages on retirement accounts make them an important starting point
for building wealth. Superannuation funds in Australia, 401(k)s in the
United States, Lifetime ISAs in the United Kingdom, Registered Retirement
Savings Plans in Canada and KiwiSaver in New Zealand are all taxadvantaged

accounts. You’ll pay less tax and be able to invest more money

Don’t Stress, Just Invest: It’s time to set up your investments and get on with your life by Alec Renehan