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When it comes to planning for your eventual retirement, the sooner you begin to start saving and investing your money, the easier things will probably be for you in the long run. On the other hand, if you happen to start saving late, or even if you haven’t started saving anything yet, there’s really no cause for alarm – there are many different steps that you can take to boost your retirement savings!
Here are four useful ways in which you can make this happen.
For starters, begin by saving and investing as much as you possibly can starting right now. This will enable the compound interest to have the chance to end up working out in your favor as time goes on. By saving and investing more money early on, you’ll end up having much more money saved up when you get older as a result.
If you have any extra money, consider putting it aside rather than going out and spending it. For instance, if you receive a raise at your place of employment, consider putting at least half of your new earnings amount into your retirement plan. Additionally, when you get your tax refund, instead of purchasing something big for yourself, consider instead getting a small reward or item for yourself and put the rest towards your overall retirement goal.
Whenever your employer makes an offer to match your contributions to your 401(k) plan, it’s always a good idea to consider contributing enough to at least take advantage of the match itself. This means that if your employers offers to match 50% of employee contributions up to 5% of your total salary, for example, say you earn a salary of $50,000 per year and contribute a total of $2,500 to your retirement plan, then your employer will end up contributing another $1,250. Think of it as basically receiving free money!
It’s also a good idea to think about opening an individual retirement account, most commonly referred to as an IRA. Typically, there are two different options for you to consider with something like this. First, there’s the Traditional IRA, which could be the best way for you to go depending on your total income and whether or not you have a workplace retirement plan. The contributions you make to a Traditional IRA may also be tax deductible. Secondly, a Roth IRA may also be a good choice for you to consider if you happen to meet phased-out income limits, which are often based upon your federal tax filing status. This type of IRA is typically funded with after-tax contributions, meaning that your qualified distributions will become federal-tax-free once you turn 59 years of age.
These are just a select few of the many ways that you can boost your overall retirement savings. For more information and to determine which options would be the best ones for you to consider, schedule an appointment with your local licensed tax consultant, as they will be the right person to help you make the most informed decision you can.
Thank you for taking the time to visit our blog, and we’re glad to have helped you learn more about ways to boost your retirement fund. We specialize in Corpus Christi real estate, and we also inform readers about what is up-and-coming in the Corpus Christi community.