We all would love to save more so we can be ready for retirement, but this is often easier said than done. For many of us, life gets in the way and our savings plans have to be put on hold. You may even find yourself looking at installment loans to help keep things afloat at times, but there are many ways you can begin saving for your golden years. Here are 6 simple ways to start ramping up your retirement savings today.
One of the most effective ways to boost your income during retirement is to hold off on collecting your social security benefits for as long as you can. The longer you wait, the higher your benefits will be once you begin collecting them. If you are able to, hold off until you are approaching 70. This age is the prime time to begin collecting your maximum social security benefit.
Start saving money as soon as you can. The more time you give your savings to build up, the more time your investments will have to grow before your retirement. Though this one’s a no-brainer, it’s still an action that is often overlooked by many young adults. No matter where you’re at in life, start saving now - your future self will thank you.
Increasing the potential capital you’ll earn through your investments is a good play when preparing for retirement. Be sure that your stock portfolio has some diversity because the first rule of investing is to never keep all your eggs in one basket. Instead, spread out your investments into a variety of financial products, including stocks, bonds, money markets and retirement accounts.
Believe it or not, you can always afford to save a little more. As a matter of fact, you can’t afford not to. With each paycheck, look for new ways to throw a little bit more into your savings. It can be a seemingly insignificant amount that’s as little as $10, but those extra few dollars each payday would add up to $20,800 over the course of 40 years, and that is before interest.
It is essential to fully fund your 401(k), especially if your employer offers a match. This amount is based on your salary and traditionally ranges from 3 to 6%. This means if you were to invest 10% of your earnings into your 401(k), your savings could be increased by $3000 to $6,000 annually. Let’s say 10% of your monthly income is $250. In 40 years, your 10% investment would be $140,000. After your employer has matched your investment by 50%, your savings would increase to $210,000.
Lastly, avoid fees wherever possible. In order to minimize the cost of managing your investments, you need to know where they are coming from in the first place. Fees are quietly charged annually and deducted from your accounts. In order to minimize these charges or avoid them altogether, investigate any accounts you have open and shop around for other comparable investment accounts. This will take a little bit of time and research, but it’s well worth the money you’ll save in the long run.
All of these ideas are simply minor tweaks that you could make to ramp up your savings for retirement. Go through them and make sure all your bases are covered. Though life may tend to get in the way at times and installment loans may even be the only thing keeping your financial emergencies at bay, being sure your retirement plan is set is the first step to financial freedom. Once everything is done, you can sit back and relax knowing that your financial future is taken care of.