Making the most of your golden years doesn’t have to be expensive. In fact, with a little bit of planning and forethought, you can easily save enough money to enjoy a comfortable retirement without breaking the bank. William Schantz of Mid Atlantic Financial LLC will guide you about how to start saving money.
4 Tips on Saving Money for Retirement
Set Your Goal
According to William Schantz, the first thing you need to do is set your retirement savings goal. This may seem like a daunting task, but it’s actually not too difficult. There are a couple of different ways to approach this.
You will need to consider how much money you will need to have saved in order to cover your expenses in retirement. This includes things like your mortgage, groceries, utilities, and any other regular bills you have. Will you be going on vacation? If yes, then what will your budget be? Do you have any debts that you will need to pay off?
You should also account for inflation. Retirement could last 30 years or more, so you need to make sure your money will still be worth something down the road.
Once you have taken all of these factors into consideration, you can start to get an idea of how much money you will need to have saved in order to retire comfortably.
Save Early and Often
The sooner you start saving for retirement, the better. This is because compound interest will start working in your favor as soon as you put your money into a savings account. The longer your money is able to grow, the more it will be worth when you retire.
You should try to save as much money as you can each month. Even if it’s just a few hundred dollars, it will add up over time. If you can’t afford to save a large amount of money each month, don’t worry. Just do what you can and try to increase your savings over time.
Invest in a Retirement Plan
If your employer offers a retirement plan, such as a 401(k), take advantage of it. This is one of the best ways to save for retirement because the money you contribute is automatically deducted from your paycheck before taxes are taken out. This means you will be able to save more money than if you were just putting it into a regular savings account.
In addition, many employers offer matching contributions, which are essentially free money. For example, if your employer offers a 50% match on 401(k) contributions up to 6% of your salary, this means they will contribute 50 cents for every dollar you contribute, up to 6% of your salary. This is a great way to boost your retirement savings.
William Schantz also suggests that you consider other investment options as well. There are many different ways to invest your money, and each has its own set of risks and rewards. Talk to a financial advisor to learn more about the different investment options available and which ones may be right for you.
Open a Retirement Account
You can open a retirement account, such as an Individual Retirement Account (IRA), even if your employer does not offer a retirement plan. This is a good option if you are self-employed or if your employer does not offer a retirement plan.
There are two main types of IRAs: Traditional and Roth. With a Traditional IRA, you contribute money pre-tax, which lowers your taxable income for the year. With a Roth IRA, you contribute money after taxes, but your withdrawals in retirement are tax-free.
Both types of IRAs have their own set of rules and regulations, so it’s important to do some research before opening an account. You may also want to talk to a financial advisor to see which type of IRA would be right for you.
With these tips from William Schantz, you will have a good headstart on saving money for retirement. Naturally, you will have to be careful about your expenses and think ahead. However, if you start saving early and often, you will be on your way to a comfortable retirement.