Most people tend to think of retirement as a far off event and thus put off planning for it. Unfortunately, this thinking does not work in anyone’s favor. Saving for retirement early creates positive investing habits as well as yields higher returns down the road. Follow these tips to ensure that time is your ally, not your enemy.
20’s
- Set your 401(k) contributions to at least 10% of your gross income, beginning with your first job.
- Resist the temptation to cut back on savings for retirement, regardless of what’s going on elsewhere in your life.
- Put any bonuses or raises you get into your retirement savings.
30’s
- Make saving for retirement a priority, even as you save for other goals, such as a house or your children’s college education.
- There are no loans or financial aid to help pay for retirement.
- Track your spending, find ways to cut back on expenses and save more for retirement.
- Put any bonuses or raises you get into your retirement savings.
40’s
- Contribute the maximum allowed amount to your 401(k) or other employer retirement plans.
- After you contribute the maximum to your 401(k), consider the benefits of contributing to a Traditional IRA or Roth IRA.
- Put any bonuses or raises you get into your retirement savings.
50’s and Older
- Take advantage of “catch-up” contributions to your retirement accounts.
- Consider retiring later or working part-time in retirement to help increase your income.
- Consider decreasing your exposure to stocks to help reduce the impact of market volatility on your portfolio.
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