No matter what stage of life you are in, retirement should be something you are thinking about. Whether you are graduating college, raising a family, or looking to retire in the next 5 years you should be finding out what you will need to retire comfortably. Life expectancy is rising, so in return you need to make your retirement last longer or have a larger retirement fund.
Here are 5 tips we think can help you be prepared for when that time comes.
It doesn’t matter how much or how little you can save, start saving now. The beauty of investing is compound interest. The difference of saving a little now and saving a lot later is huge when you look at it in whole. Someone that saves $50/mo at age 25 with a 6% return will have $150,109, and someone that saves $75/mo at age 35 will only have $100,954.
Take Advantage of Employer Benefits
It is critical to take advantage of employer retirement programs whether it is having a 401k, matched employer contributions, or Roth IRAs. There are many benefits to having an employer that offers these types of programs. If your employer offers matching contributions, max out what they are willing to pay because if you don’t you are only leaving free money on the table. Another benefit of contributing to a 401k is that it is pretax so it will make investing in your retirement much easier to budget for each month.
Use Raises & Bonuses Wisely
This tip takes discipline, but when you receive a raise or a bonus take some of that and invest it into your retirement. When you receive your raise make sure to increase your monthly savings equally to keep your retirement fund on track and healthy.
Review Your Retirement Plan Regularly
Since time is of the essence it is important that you review your retirement plan regularly. You can review this with your retirement planner. By reviewing your plan throughout your career you can pivot when you need to and be prepared when it is time to retire. The smallest change early on can make the biggest difference in the end.
Pay Yourself First
One of the most important things you can do through this whole process is to pay yourself first. If you will take this portion of savings out first, it will be easier to budget for and you will be glad you did when it comes time to retire. You can automate this by setting up automatic transfers in your online banking so you don’t have to worry about it.
Idaho Central aims to help our members achieve financial success. Planning for retirement is key to having financial success in those later years. We are proud to provide retirement products like Traditional and Roth IRAs to help our members prepare for retirement.
We believe the best is yet to come!