Retirement may seem far off but if you don’t save now, you will be left with a paltry bank account to travel, spend time with grandkids, and truly just enjoy life. Did you know that only one in six Americans claims saving is one of their top financial priorities, according toBankrate? That number should be much higher. Trying to boost your savings potential? Check out these top nine tips for saving for retirement.
- Step up your 401(k) contributions. When you aim to strengthen your retirement savings, it’s easy when you contribute more than the minimum. If you have an employer match program, take advantage and enjoy the extra money at no extra expense to you.
- Maintain an emergency savings account.Just one in four Americans have enough savings to cover them in an emergency, another number that should be higher! Even worse — 25 percent have no savings to speak of. Research the highest interest rates on savings accounts and enroll in automatic direct deposit. Make sure this account is liquid at all times in case you have to dip into it for car or house repairs, for instance.
- Put money into your IRA. As a working American, you can add to an IRA, contributing up to $5,500 when under the age of 50. Over age 50, and you can put $6,500 in per year.
- Know what you’re saving for. The Department of Labor points out that you should save at least 70 percent of your pre-retirement income to stay in line with your current standard of living after retirement.
- Diversify your investments to reduce risk and maximize returns. Every year or sooner, re-evaluate your plan to see if you should switch it up. Goals change over the course of your working life, so plan accordingly.
- Find out about any employer pension plans your company offers. You can learn this information by visiting your HR department. Ask if you are covered and what your benefit is worth according to your individual benefit statement.
- Don’t touch your 401(k). Easier said than done, we know – especially if you’ve encountered tough times in your 40s or 50s. Try to exhaust all other sources of income before you dip into retirement, or else you will lose principal and interest, as well as tax benefits,plus you’ll pay big withdrawal penalties.
- Find out what you’ll be getting for social security. Generally, social security benefits total about 40 percent of what you earn before you retire. Want to see what you’re entitled to ? Check out theSocial Security Administration’s Websiteand use their retirement estimator.
- Form a trusted partnership. Sit down with a reputable stock broker or financial planner, keep educated on your goals and know what’s going on. Part of that is learning the name of a securities lawyer you can depend on.
Following these ninehelpful tips is your best bet to ensuring comfortable retirement for you when you hit age 65.