Helpful Retirement Saving Tips

We have all been told that its never to early to begin saving for retirement.

Although it may seem simple to say, applying the techniques may be trickier to conquer than we think. With all the expenses that life throws at us, it can be difficult to fathom ‘saving for retirement’ and we can also fall behind in our savings plan when we can’t contribute an adequate amount. Putting money aside for your golden years is essential to maintaining a financially sound life after your working years. Are you having difficulty with where to begin?

5 Helpful Tips That Will Help You Save For Retirement

1. Catch-up Contributions to 401(k)

It’s advisable to contribute to your 401(k) plan as soon as you are earning an income that will allow you to set aside money.

Did you know that the maximum salary reduction contribution to a 401(k) this year is $18,000? However, if you turn 50 this year, you are allowed to contribute an extra $6,000 to your retirement savings plan. Your employer will have some sort of 401(k)  match that will help you attain your retirement goals (source).

2. Catch-up Contributions to Simple IRAs

Perhaps the company that you work for opts to have a SIMPLE IRA. The minimum contribution for 2017 is $12,500 and once you reach the age of 50+, the contribution amount increases to an optional $3,000. The total contribution then reaches $15,500.

Basic as well as catch-up contributions for this type of SIMPLE IRAs can be adjusted on an annual basis.

3. Catch-up contributions to IRAs

Even if you do not have a retirement savings plan locked in, there are other options available that will help you to save. You can boost retirement savings via IRAs as well as Roth IRAs.

The minimum contribution is $5,500 and increases by $1,000 after the age of 50.

4. Catch-up Contributions to HSAs

This type of contribution is great if you have a high-deductible health plan. This HSA allows you to contribute to health savings account on a tax-deductible basis. The contribution depends on several factors and varies for every individual based on whether you have self-only coverage or not.

5. Delay Social Security Benefits

At age 62, you can begin collecting social security benefits. You are able to increase the benefits of monthly coverage when you delay the benefits past full retirement.

For example, those at full retirement age (66) who choose to delay the benefits until they turn 70, will notice an increase in their benefits by 132 percent (Source).

Those who are 50 years old and older can partake in catch-up contributions. Retirement can be a scary thing, especially if you feel as though you are not financially ready yet. Catch-up opportunities are a great way to contribute to your retirement savings plan so that you can relax during your golden years.

wizard_ishAugust 24, 2020