When Should You Start Saving for Retirement?
When Should You Start Saving for Retirement?
The answer is now. It is never too early to start saving for retirement. Whether retirement may seem like a lifetime away, or it is closer than you’d like to admit, the time to start saving is now. Here are 6 quick ways you can prepare for retirement:
Start now. The earlier you can start saving for retirement, the better prepared you’ll be. Money in retirement savings accounts accrues compound interest, meaning each year the money in that account generates earnings which, in turn, generate their own earnings. If you start saving in your twenties, that money will sit for years until you retire and has plenty of time to grow.
Automate your savings. It can be difficult to put away money for a retirement that can be decades away when you’re focused on affording the present. You may be tempted to spend that money on bills, groceries, and other immediate necessities. Consider setting up your retirement savings to pull directly from each paycheck. The money will never hit your checking account, so you’ll be less inclined to spend it on daily necessities.
Increase savings with increased funds. While it can be beneficial to automate your savings, it’s equally as important to revisit your retirement account contributions over time. If you receive a raise, for example, consider increasing the amount you’re contributing to your 401(k). Also, consider saving a portion of the money from any bonuses or tax refunds you receive throughout the year.
Make sure you’re getting your company’s match. If your employer offers a match to your employee retirement plan, make sure you’re contributing enough to receive it. If you don’t take advantage of your company’s match, you are basically turning down free money.
Consider an IRA. IRA accounts are like personal retirement savings accounts. If you are eligible to open an account, you can open a Traditional IRA or a Roth IRA. Click here to learn about Unity Catholic’s IRA options.
Seek Help. If you aren’t sure if you are on the right track with your retirement savings or you are unsure how much you already have saved, don’t be afraid to reach out. There are so many online resources you can turn to while doing your research! Still need additional help? Contact Unity Catholic and we will help make sure you reach your retirement goals!
Still new to the idea of a retirement plan? Click here to read a Beginner’s Guide to Retirement Savings!
Source: Ohio Credit Union League