Saving for retirement may be at the top of your New Year’s resolutions as far as money is concerned. You may have started saving a little bit, or you may be saving only what your employer forces you to. You may want to start becoming more aggressive, or looking for ways to up what you are putting in your retirement without really affecting your budget. Here are five options to easily increase your savings for retirement.
1) When you receive a pay increase this year, simply increase your retirement contribution by the same amount. Your paycheck should not change, since your 401K contributions are considered pretax dollars. The IRS does not tax you on the money you contribute to your 401K.
2) Additionally you may want to consider putting in a higher percentage of your income into your 401K, because you can often increase this a few percentage points, without it really affecting the amount of money that you are bringing home each paycheck. You can figure this out using a payroll calculator.
3) You should sit down and figure out how much you actually need to retire. It would be a good idea to sit down with a financial counselor and discuss the options available to you. Many companies offer these services for free through the human resources department. You may want to call and see what is available to you. You can also find financial advisors at your bank or credit union. It is important to realize that they may be selling you a product, so you need to clearly understand what the advisor is saying.
4) If you qualify for an IRA account, take advantage of the tax break this year. You can contribute the money pre-tax as well, which will allow you to save money on taxes.
5) You may want to consider investing money outside of your 401K and IRA accounts for retirement. It depends on how much money you want to have saved. You should max out the tax savings that you can, and then look for good mutual funds to do the rest of your investing.
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