Retirement can be a rewarding time of your life filled with freedom and the time to pursue your passions. Financial security plays an important role in living the retired life that you envision and provides a stress-free retirement.
Here are 6 ways that you can start increasing your retirement savings today:
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Start as early as possible
The earlier you start saving the better it is, with the magic of compound interest allowing you to reinvest the earnings from your savings, back into your savings. However, you can start at any stage to reap this benefit. As you get closer to your retirement, you can start delaying receiving your social security payments, adding them to your retirement savings.
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Invest in your 401(k) and meet your employer’s match
In the case that you are eligible for a standard 401(k) plan, make sure to invest in it to generate pre-tax savings without it hampering your budget as much. In the case that your employer offers to match your 401(k) plan contributions, make sure you contribute at least up to the limit that your employer is ready to match. This is an easy way to add essentially free money to your retirement savings.
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Open an IRA
A traditional individual retirement account (IRA) allows you to make tax-deductible contributions with tax-deferred earnings on your investment till you make withdrawals upon retirement. In the case that you meet the phased out income limits, a Roth IRA may also be a good choice for
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Make catch-up contributions to your IRA and 401(k)
IRAs and 401(k) plans have limited yearly contributions. However, past the age of 50, you can go beyond the normal limits with catch-up contributions.
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Automate your savings and investments
Most banks allow for automated services for your IRA, allowing you to automate transfers from your savings into your IRA also to select which funds to invest the assets into.
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Have a goal in mind
When saving and investing, it is important to have a goal in mind for the retirement you envision. Knowing your target and the steps required to achieve it go a long way in making the entire process more rewarding and simplifying financial decisions along the way.