It’s never too early or too late to start planning for retirement. Consider the following six tips to start growing your retirement fund.
Start saving early.
This one is simple. The sooner you start saving, the less you have to save each year. Most experts recommend that you start saving around age 25. Make it a habit early on to make it less of a problem later in life.
Contribute to your 401(k).
If your employer offers a traditional 401(k) plan, it allows you to contribute pre-tax money. This can be a significant advantage. If your employer offers a Roth 401(k), it uses income after taxes rather than pre-tax funds. If this is the case, consider what your income bracket will be in retirement to help you decide whether this is the right choice for you.
Meet your employer’s match.
An employer might offer to match your 401(k) plan. If this is the case, contribute enough to take full advantage of the match. Don’t leave the offer on the table. It’s basically free money!
Set a goal.
There’s nothing better than seeing yourself complete a goal. Knowing how much you’ll need makes the process of saving easier. Setting goals or benchmarks will give you something to strive towards and give you a feeling of satisfaction when you reach a goal.
Rein in your spending.
Examine your budget. Are you spending a lot of money on frivolous stuff? Try cutting down on the extra expenses to add more money to your retirement plan. Try saving money by bringing your lunch to work instead of buying it. There’s plenty of money-saving tips online. Find some that work for you and your lifestyle.
Stash extra funds.
If you have extra money, save it, don’t spend it! If you get a raise, increase your contribution percentage. Try to dedicate half of your new money to your retirement plan.