Plan for Retirement
It’s never too early – or too late – to start planning for your retirement.
The more time you allow for your savings to grow, the bigger the nest egg you’ll have when it’s time to cash in, which is why it’s important to start saving today!
Here’s how to get started on planning your retirement.
Set a target number
First, determine how much you’ll need to have saved for living comfortably and independently throughout your retirement. Experts advise taking your current living expenses and multiplying the number by 400 to identify the amount you’ll need to sustain yourself based on a 4% return.
Choose your retirement account strategy
Next, you’ll need to select a place to keep your retirement savings. There are many options to consider, some of which you may already have if you are, or have been, employed. Here’s a quick review of the three most common retirement accounts:
1. High Yield savings Account
High Yield savings accounts are a great way to build up your savings that comes with a higher return than your normal account. Savings accounts are easy to get into and are the perfect spot to save for your future! Learn more.
2. 401(k)
If you’re employed, you likely have a 401(k)that’s working toward collecting money for your retirement. Take advantage of this retirement tool by maximizing your contributions. Also, many employers match a portion of (or all) contributions you make, which is basically free money, to help your retirement savings grow, tax deferred.
3. IRA
There are two popular kinds of Individual Retirement Plans (IRA): conventional IRAs and Roth IRAs. A conventional IRA will let your money grow, tax-deferred, but withdrawals are taxable. A Roth IRA does not feature tax-deferred growth, but qualified withdrawals are not taxed. Like a 401(k), some employers match a portion of (or all) contributions. But there are federal limits on how much money you are allowed to add to your IRA each year.
After you’ve selected your retirement fund, you’ll also need to choose somewhere to invest. With a bit of work, and a lot of planning, you’ll have your future secured in the best way possible.