When you work for an employer, you fill out a lot of forms to select your medical and retirement benefits. For retirement, you ideally pick a percentage of your income to invest in an employer-sponsored retirement account. Many times companies will match up to a certain percentage of your investment.
The amazing thing about this is that you never see the money. You don’t have to write a check or transfer the money yourself so you start to see the balance in your retirement account rise. The deposit happens before you get your check, so the investment isn’t painful at all.
As a self-employed author, I had been investing money into a Roth IRA automatically each month. I realized, however, that I wasn’t putting in the full 15% of my gross income that I thought I was investing.
When you work for yourself, your income fluctuates. It is not as easy to automate your retirement investing.
I’m trying something different this month. I turned off the automated investment and I am going to manually invest 15% of my income from month to month instead.
I haven’t transferred the money for this month yet, but I have to say that it is way more difficult that I thought it would be.
While 15% may not seem like a lot of money, when you see the actual dollar amount and intentionally remove it from your bank account, it is a little scary.
It really makes me appreciate the benefit of automated investing. It removes all mental and emotional attachment to the investment process.