The dawn of each day means that your retirement is approaching nearer. It is wise to have something put away so that you live a comfortable life after retirement. Experts say that you need about 70% of your pre-retirement income to keep up with your current lifestyle during retirement. Discipline and dedication will ensure that you built an egg nest for yourself; here are some tips to guide you through.
If you are not putting some money away in savings, you should start right away. It doesn’t matter how small you start; the important thing is that you start saving. If you start saving as early into your career as possible, compound interest and time will work to your advantage.
Manage your debt
It is good to pay off debts as quickly as possible. Living within your means will ensure that you do not have to borrow money a lot to support a lifestyle.
Tax-advantaged accounts allow you to put money in them before it is taxed. Using a 401(k) account is a great decision. You can contribute up to $18,000 which is way higher than an IRA or a Roth IRA account. Refrain from withdrawing from your retirement account as this makes you lose interest in the principle. You also get to pay taxes on withdrawals.
Get your employer to start a plan
Suggest a retirement plan to your employer if he doesn’t offer one. There are simplified employment plans that can help you and your employer.
If there is a traditional pension plan in place, find out whether you are covered. Ensure that you understand how it works and what your benefits are worth as an individual.
Learn investment basics
Do not be intimidated by investment. T can be quite easy if you have the right information. Talk to investment experts and financial advisors to help you charter a plan on making an investment to secure and grow your finances for the future.
401(k) and IRA accounts limit the amount you can contribute to them yearly. The good news is that if you are age 50 and above, it is possible to contribute above normal limits with the catch- up contribution provision. This will help you boost your retirement saving if you haven’t been saving well.
Ensure that the contribution to your savings account is automatic with every paycheck. This instills the discipline that would otherwise be hard if left for you to handle.