Retirement may seem far away, but there is no time like the present to start saving. When you retire, you will want to be able to be financially independent and have a good nest egg to rely on. Even if you start saving bit by bit, you’ll soon amass a lot of savings that will help you to live the retirement of your dreams.
Here are some things you can start doing today that will help you create a retirement savings plan.
Open a 401(k) or a ROTH IRA
If your employer offers a 401(k) program, join it — especially if the company offers a match program. That means the company is literally giving free money to you for the duration of your employment. If this isn’t an option, consider a ROTH IRA, which you will fund straight out of your paycheck but is tax-free once you withdraw money. Even if you put just $20 a week to your retirement savings, that is $240 per year, and $2,400 in 10 years that you wouldn’t originally have had.
Automate your savings
Talk to your bank to see whether you can set up an automatic transfer to your savings account every time you get paid. This way you won’t see the money you are putting away, so you won’t even miss it!
Set small goals
The key to setting financial goals is to make them small and sustainable. If you make a broad and large goal, such as setting up a retirement plan, it can be easy to get overwhelmed and eventually give up. But when you create the goal in smaller increments, you are more likely to succeed and even surpass your goal. When you sit down to create your plan of action, we recommend setting a six-month goal, a one-year goal, and a five-year plan. Simple, tangible goals are key.
Invest your bonus and raise
If you come across extra money, put it away. Think of it as a boost to your savings, and don’t think of those funds as “found money.” While a vacation or a shopping splurge may sound wonderful, a change in your income should definitely mean a change in your contributions.
Get into a new mindset
Don’t beat yourself up for not creating a savings plan until now. Things happen, and that is all in the past. It is never too late to start saving, and right now is a great way to start. Slow and steady will win the race.
Pay down debt one at a time
You’ll want to start your retirement with a clean slate, so pay off your debt now while you have a steady income. But if you have a lot of debts, it can be easy to feel overwhelmed, so pay off one debt at a time. Again, having small goals will make you feel more confident when it comes to creating a healthy financial balance.
Talk to a financial planner
You never know what options are out there for you until you speak to a financial planner. A trusted financial planner will be a great resource to help you figure out the right investments for your lifestyle, creating savings accounts, and make an overall plan with your financial goals in mind. The best part about a financial planner is that you don’t have to constantly meet with them; you can meet once every six months to ensure everything is working as it should, and let it be!
While nine out of 10 Americans know they should be investing in a retirement savings plan, only 75 percent are. Don’t wait until it is too late, and pocket those pennies today!
