Three Simple Ways to Significantly Increase Your Retirement Savings
With the advent of new technology in the world, life expectancy has increased for many of the world’s population. The increased cost of living has caused many to wonder if they are saving enough for retirement. Thankfully, this guide of three simple ways to significantly increase your retirement savings is here for you!
You can be more confident in your “nest egg” by applying three simple steps. Start early by saving a little bit each month. Make sure you pay attention to your taxes, and take advantage of deferred compensation and employer-matched retirement programs to increase your take home pay and save more.
Start Early With a Long Term Goal
One of the best ways to significantly increase your retirement savings is to start early with a carefully researched plan. Identify your current income and savings and characterize the extra money that you could invest in your future. Although your resources might be limited, you can plan early to save a little each month in an interest-bearing account. By so doing, your savings will grow steadily and the interest will work for you. This is called compounding interest. If you happen to live in Texas, consider the benefits of employing the assistance of a finance professional like a Wealth Management Dallas expert to help you make financial plans and manage your money judiciously. If you are looking for more general financial advice and like to learn things yourself, check out the book I Will Teach You to Be Rich by Ramit Sethi.
Save on Taxes and Investing in Your Future
Deferred compensation is an amazing way to save on your taxes upfront and save for your retirement. Through deferred compensation, a determined amount of your income is placed in a specialized interest bearing retirement account like an IRA. Because this money is not counted as your income, it is not part of your taxable income. Thus, the money that you put into deferred compensation not only will gain interest; it can pay partly for itself in the tax money you would have had to pay on the higher income. Deferred compensation is an important tool in creating another pool of retirement income.
Identify an Employer-Matched Retirement Program
Many employers will offer specialized plans that will match a certain percentage of your contribution towards a retirement account – this is typical of a 401K retirement account. Take full advantage of these programs to significantly increase your savings. Remember that these matching funds are increasing your take home pay in the long run. With careful research, you will be able to find out the highest percentage that your employer will match, and you can budget so that you maximize your benefits. If these programs allow you to customize your investment, make sure to identify the investment plan that will best increase your savings such as a market index fund.
Enjoy the Peace of Mind of Sufficient Retirement Savings
US News reports that good retirement savings help you live a more confident, peaceful life. When you start early by saving a little bit each month, you will increase your retirement savings and let interest be your best friend. With consistent, automatic savings, you will likely forget that you are even doing it. After a few years, you will look at your account and be amazed!
Three Simple Ways to Significantly Increase Your Retirement Savings – Final Thoughts
Investigate your employer to see if there is a deferred compensation program. Contributing to this plan will not only lower your taxes, it will create another pool of retirement income for which you will be grateful. Lastly, contribute as much as financially reasonable to an employer-sponsored matching program. This increases your take home pay and your income. By completing these easy steps, you will be taking significant steps to saving for your retirement.
I would add direct deposit from each paycheck to the list too. When the savings is removed from your check before you see it you don’t even miss it and can lead to sizable savings before you know it.
Mike,
Great point – if you don’t see it, it is like it was never there!
Saving for retirement is extremely important. If one is not already doing so, they need to sit down and take a look at their finances and see how they can make it work. Great tips, thanks for sharing.