Retirement seems to young professionals like a lifetime. But as careers progress, families are established and milestones are met, retirement can begin to feel much closer.
A 2014 Gallup poll shows that most Americans are now retiring at the age of 62. This is a good starting point for planning your retirement. The earlier you start setting savings goals and launching plans, the more likely you are to retire on time without worrying about money. These strategies can help you save more for retirement years.
1. Raise… which raise? If you’re lucky enough to increase your salary at work, direct the excess money to retirement savings accounts and act as if the raise never happened. You won’t miss out on extra money because you weren’t used to earning it, and switching to retirement savings can greatly secure your financial future.
2. Maximum deposit amount. By depositing the maximum amount allowed into your retirement accounts each year, you can quickly increase your retirement savings and earn significantly more interest on your money over the life of the account.
3. Assign a tax refund. Decide to apply the tax refund to a traditional IRA or Roth IRA.
4. Take advantage of employers ’offers to match pension contributions. Many employers match the 401 (k) contribution if you save enough to qualify. This is an easy way to save without extra money from your own pocket. Make sure you are entrusted with a 401 (k) plan so that employer contributions can be taken with you if you leave the job.
5. Open the Roth IRA. The Roth IRA is a retirement savings vehicle that allows you to pay taxes on the money you put in advance. When you become eligible to withdraw funds (after the age of 591), they are tax-free.
6. Aim for a 15 percent investment. Start investing 15 percent of your gross retirement income once you get rid of debt and have a fully funded emergency fund. Such a strategy can largely ensure that you have enough money to do what you want during retirement.
7. Make calculated cuts. Think about what items you can live without and dedicate to what you would spend on those retirement expenses. For example, calculate the difference between buying a new car and a certified owned model. Retire your savings. Can you skip this year’s vacation and take a vacation instead? Giving up a certain luxury can help you create retirement savings.
Saving for retirement becomes a little easier with strategies that can make money further.