Every March, millions of people become obsessed with filling out their brackets for the NCAA Men’s Basketball Tournament. Making those selections are often well researched, thoughtful decisions. In fact, how you approach your tournament choices can help guide the way you handle your retirement savings. Here and 3 ways:
Know the Teams
When you’re selecting teams for each bracket it helps to be informed about their status going in to the tournament. Are all the players healthy? Has their game play remained consistent throughout the year? When you’re planning for retirement, knowing the ins and outs of how to go about saving for your golden years is important. Your long-term roadmap should include setting up an emergency fund, paying off your loans and saving as early as you can. A common rule of thumb is that you should be saving 10% of your pre-tax income for your own retirement. Don’t think you know enough about how to save? Seek out tools developed by trusted, reputable experts to help you make a plan.
Mix it Up
You may be tempted to choose the highest profile basketball programs for your brackets, but the favorites don’t always go all the way. It’s very hard to win the tournament pool if you don’t give lesser known teams a chance. Smaller schools will often make the tournament interesting by upsetting the favorites, so pick some smaller schools to have a better chance of winning. You should do the same for your retirement savings. Many companies match a portion of the money you contribute. Opening a Roth or Traditional IRA account, which are tax-advantaged accounts designed to help you save for retirement, are also good options. Make sure to explore various avenues that can help you save.
Adapt to Change
The best teams in the tournament always have a plan in place to win before a game, but they are also adaptable. The coach and the players make adjustments on offense and defense to beat their opponents. You should take this same approach with retirement. As you build your nest egg over many years, there may be some expenses that derail your financial plan for a time, such as an illness, or having to take care of a family member. Expect changes and be flexible to keep your retirement game plan on track.