No matter where you are on life’s journey, it’s always a good thing to start planning ahead, especially regarding financial matters. Of course, saving money may seem dreary when the other option is to spend it on food, clothes, entertainment, vacation. But you will be able to stop working sooner and go on all those vacations you have planned in your head if you just start saving a little at a younger age. This is especially true in this day and age, because if you are just waiting for a company pension or social security check, think again. Those once relied upon assets are becoming a thing of the past, unfortunately. The programs are still in existence, but the checks for millennials won’t be quite as fat as they were for baby-boomers. There are a few tips and tricks that can help you save your money and get yourself sitting pretty when the time for retirement rolls around.
Make a Budget
A popular option these days is to make a budget for how much you plan to spend when you are in retirement. Of course, you may not know exactly how much you are going to spend on September 19, year 2070, but you can give yourself a rough outline to determine how much you should save in your younger years. If you have any big-budget items (think things you wanna cross off your bucket list), definitely make sure you consider those, they could include vacations or permanent geographical changes. Once you have this budget in mind, you can begin savvy ways of saving, as expressed here and make your dreams a reality.
Save money regularly
It might seem tedious, but putting a little bit away often is a better plan than making huge lump sum deposits into your savings later in life. A good benchmark is to save 15-20 percent of your salary, if you can- this of course depends on your disposable income. A good way people invest money for later life is by setting up a 401(k), by which you can save $18,000 per year. This money will also accrue interest, and the longer it sits in an account, the better, because the more it will grow. When considering a 401(k), it’s important to understand the difference between a regular 401(k) and a Roth 401(k). With the Roth plan, you will not have to pay taxes after you withdraw the funds in retirement, but with the traditional plan, you will have to, so make sure you consider all of your options. Also whenever you get a bonus or raise, make sure you invest or save a little bit of that, because that’s income that you weren’t necessarily expecting and therefore do not rely upon as heavily. This can create a nice little nest egg if you are frequently getting bonuses or raises at your job.
Lastly, remember that there are entities outside of your own personal saving that can help you prepare for retirement. many employers often programs in which they will match or contribute to your retirement savings. Make sure you take a look at the programs offered at your workplace. Happy saving!
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