Princeton Merchants Association

Our mission is to create a vibrant and sustainable local economy in Princeton by attracting, nurturing, and maintaining a mix of businesses that serve the economic, social and material needs of our community and make Princeton a great place to live and work.

November General Meeting: Everyone Needs a Retirement Plan

Everyone needs a retirement plan.  Thinking that you can sell your business and retire on the proceeds is not a plan (you cannot always cash out of a business: it may not survive until you are ready to retire, your transition may not involve cash, and the cash you receive may not be enough on which to retire.)  Given currently increasing  life expectancies, you may live for twenty or more years after retirement and the expenses  may include increased medical care and assisted living, which alone might be $200k a year.  Food, shelter and enjoying your retirement beyond subsistence will be on top of that.  A good plan will involve putting away money now and every year thereafter and there are options approved by the Federal Government that will allow these savings to grow faster and accrue fewer taxes than other options.  These can include company sponsored 401(k), 403(b) and 457 plans, as well as various IRAs and SEPs.  Offering plans that include your employees can also help attract and retain valued workers.

If you have children, there is a good chance that they will want to go to college.  College is expensive and costs are rising faster than inflation.  While there are no plans that allow for saving pre-federal tax dollars, like retirement plans, there are plans that allow saving pre-state tax dollars (though NJ is not one of them.)  There are federal-tax qualified plans that allow for savings to grow tax-free and to be tax-free when the money is withdrawn, as long as the money is spent on higher education (college level and above.)  These plans are sponsored by individual states, some states have several options, and there are no income limits.  There are maximum contributions limits, but these are generally over $300K.  Beneficiaries of these plans can be changed over time, so that different family members can benefit and the plans can even be effectively used as estate transfer tools.  Other college savings plans exist with more limited benefits as well.

No matter for what you are saving, you have choices with regard to which companies you are funding with your investment dollars.  (No matter where you put savings, you are providing base capital for one or more businesses to operate.)  It is important to investigate the values of the companies you are bankrolling and choose only those whose behavior and values align with your own.  (You may be uncomfortable owning a company who is a major polluter, a weapons manufacturer, or one that relies upon forced labor, for example.)  By choosing which companies you are funding with your savings, you have a voice in what companies exist, what products or services they provide, and how they behave, all of which play a critical role in the world and society in which we live.

Theodore Casparian is a financial advisor with Wells Fargo Advisors in Lawrenceville.  He is always available to answer questions about college, retirement, or any other financial matter, without any obligation to transact business.  He can be reached at 609-213-2218, or

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