Boost Your Savings – How Can You Do It?
There are many reasons why it’s important for people to boost their retirement savings.
The truth is, people are going to live a lot longer. Moreover, the current stock market is going to continue to have up-down swings; people will lose their jobs as well.
Even though it’s a challenge, taking these tips into consideration positions you to see growth in your bottom-line retirement.
Start a Side Business
The best way to continue to earn money after retirement is to have a side business in order to generate revenue after retirement.
Also, keep in mind that everyone’s situation is not the same so don’t put your full-time job at risk. A great way to start is to start a business in your 60’s that correlates with what you’re passionate about.
If you didn’t know, it’s a lot easier to start a business in your 40’s and 50’s than after you retire. Whether you realize it or not, you might already have a strong network in place that will solidify your income after retirement.
On the other hand, people may not take you as seriously after you retire. That’s just how it is at times.
Another thing to note is that you have the opportunity to use the money you save as additional capital for your business. Furthermore, there are people out there that think that they easily get a return on the business they sink in.
Launch an IRA
Everyone should consider opening an IRA (Individual Retirement Account) to begin building their retirement fund. Here are your two options: a Traditional IRA or a Roth IRA
Aim to get a Traditional IRA if your income allows it and if you and your spouse have a retirement plan with your jobs.
Moreover, what you contribute to a Traditional IRA has the potential to be tax-deductible. On top of that, the earnings you invest have the potential to grow tax-deferred until you begin withdrawing during your retirement.
If you meet the income requirements, having a Roth IRA can beneficial to you. You fund your IRA by after-tax contributions.
If the conditions are met, there are benefits available. As you nurture your IRA for at least five years at the age of 59 ½, your qualified withdrawals and what you earn are free from federal taxes. There are instances where they are also free from state taxes.
Set up a Saving Plan
It may be easy for you to save and invest towards your IRA but you might not like the idea of having to pay a large lump sum at the end of the tax year.
Moreover, a better way to invest in your IRA is by implementing a monthly or quarterly contribution that’s taken out of your checking/savings account automatically.
Establishing an automatic payment plan takes stress off of having to pay for your retirement manually. It’s always important to pay yourself first and foremost.
All you have to do is set up your IRA to withdraw from your checking and/or savings account or money market account from the bank you have a relationship with. In addition, you also can do this with your savings and loan, credit or brokerage account.
Whatever amount you decide to invest in your IRA is good; the more you invest, the faster you will meet your retirement goals.
If you know without a doubt you can’t afford to put the maximum contribution into your IRA, start off with a smaller amount. As you continue to contribute to your IRA, the amount you invest can increase until you reach the maximum amount you can put towards it.
Contribute to Your 401(k)
If the company you work for offers 401k packages you are ahead of the game. As a result, you have the opportunity to contribute pre-tax money.
Let’s say that you are in the 15% tax bracket and you’re planning to contribute $100 every time you get your paycheck.
Since what you contribute is taken out before they assess the tax, what you receive as take-home pay only decreases by $85. The less that’s deducted, the more money you have to invest with without putting stress on your family budget.
If you didn’t know already, you have the opportunity to pay large amounts of expenses altogether or over a set period of months. A lot of companies will offer you a discount if you decide to pay your expenses all at once.
The idea behind this is to break down the amount they require into smaller portions so you can save money per month. In addition, putting them into a special account is quite beneficial. When you have to begin paying your expenses, you are already a step ahead.
“It’s not how much you make, it’s how much you keep that matters.”
When you think about, that’s common-sense. For instance, if you only have $2 million in the bank and you spend a dollar more, you have a negative balance.
Moreover, it would be wise for you to monitor your expenses. Even though this may seem simple, it would shock you to know that most people spend more money than what they make. This leads to a person falling into tons of debt.
Remember to always read the fine print so that you have clarity on the fees you’ll have to pay. Doing so can potentially save you money.
For instance, if your mutual fund amounts to $10,000 that charge you 3% in fees, that’s $300 per year.
If your mutual fund gives you a 7% return every year, you’d have paid $4,435 in base fees after 10 whole years. That amount doesn’t include the returns you lost on that money.
If the area in which you live is expensive, you can always relocate to a less expensive area. Moreover, you can add the additional cash you got from relocating to your retirement account. As a result, you’d have more money invested than what you would have had prior.
If you are the only one living in a house that’s a size for a large family and that your property has appreciated in value, it’d be wise to sell the property.
I’d be better for you to live in a smaller house anyway. On top of that, you’ll save money on the mortgage you have to pay per month.
You’d also save a lot of money in regards to maintenance such as heating, cooling, insurance, home maintenance, and property taxes. Moreover, you can put some of the money you made on the sale into your retirement account and enjoy the rest.