With less of a safety net from social security each year, it is a reasonable assertion that our retirement savings will need to be heftier than ever. Though it should be good news to hear that numerous avenues can be taken to provide a sufficient and even comfortable cushion for retirement.
Take Advantage of a 401k Today
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Check with your Human Resources provider and ask them if you are eligible for a 401k. When you invest in a 401k, the money is pulled out of your check before taxes are applied. This will lower your overall yearly tax burden while retaining the money that would have been taxed. If your employer offers a matching program, make sure that your contribution at least meets the match rate.
For example, your employer offers to match 50% of employee contributions up to 5% of your salary. Let’s say that your salary is $100 and 5% of that is $5. If you put in at least $5 to your 401k monthly, then your employer will match $2.50. So instead of only putting away $5 with your contribution alone, the employer match will raise that to $7.50 every month.
Know That Even Small Savings Add Up
There are numerous small ways to save that will add up in the long run. Scroll through your bank statement and look for any recurring subscriptions that you can part with. Some apps can also round up every purchase to the nearest dollar and put the change into your savings account. For instance, if your purchase is $17.34, the remaining $0.66 will be put in your savings account. Even reducing your existing subscription services to lower tiers can stack up savings. Consider switching to streaming media instead of cable.
Manage Your Debt Now
Debt management may not seem like much of a savings plan. However, consider saving all of the interest that you’ve paid. That would add up very quickly. Interest is money you are being charged on top of what you owe. Creating an effective debt management solution early on and committing to chop down your debt will save you big in the long run. The same strategies we used in the previous section to make small savings add up can be applied to paying off your debt.
Invest For Your Future
You don’t need to know how to make money in stocks to be able to take advantage of the benefits. Taking advantage of an IRA allows you to allocate your pre-tax dollars to an investment fund. The first step is finding a good broker who will get to know you and make the best recommendations for your money to achieve your retirement fund goals. Choosing an IRA with the lowest fees possible will ensure the greatest return for you. Allocating your assets over a few categories will also reduce the losses that will happen in market volatility.
It’s never too early to start saving for retirement. Learning to invest in stocks now will pay off big in the long run. Combining all of these approaches will ensure that any person can have a comfortable nest egg for their retirement.