Monday, May 6, 2019

How to Invest in Your Retirement

Saving for retirement can be a daunting task for many people. You know it is important to have money set aside for later in life, but you may be overwhelmed by the logistics and unsure of your options.

Actually, like many things in life, investing in your retirement is not so stressful when it is broken down into smaller, more manageable chunks of information. For instance, consider the following three ways to save, invest and plan for retirement:

Take Advantage of Any Matching Options for Your 401K

If your employer offers a retirement plan like a 401K and also matches a certain percentage of the amount that you contribute, by all means do whatever you can to add the max to the retirement account. Any amount that your employer matches is essentially free money, so it’s definitely worth looking into. 

A common scenario in the 401K match world is for your employer to put 50 cents into your retirement plan for every dollar you put in—this is usually up to 6 percent of your gross salary for the year. So, if you earn $40K at your job and contribute $2,400, or 6 percent to your 401K plan, your boss will add in $1,200 more.

Start Your Own Tax-Advantaged Nest Egg

While a 401K is a great place to start, especially if it involves the aforementioned matching option, you should also consider starting your own retirement savings accounts. You can open a traditional or Roth IRA account, and put money into it as you can; this will allow your money to grow tax-free until your start to withdraw it in retirement. 

You can speak with your banker about opening an IRA account or if you have a financial planner he or she can help you as well. There are limits for how much you can contribute to an IRA every year; on the flip side, you can also set aside smaller amounts of money into the account.

Have an Action Plan in Place for Financial Emergencies

In a perfect world, you will continue to work as long as you wish and then live happily off of your retirement savings. Unfortunately, people sometimes encounter severe financial emergencies that can wipe out their savings. For instance, a serious medical condition that requires months of treatment and hospital stays can be devastating for your retirement accounts. 

To help prevent your nest egg from being shattered, you may want to have an action plan ready to go that will help pay for medical treatments and other financial emergencies. One idea is to look into selling your life insurance policy through a company like Coventry Direct. 

This will allow you to gain access to much-needed funds to help pay for medical bills and other financial hardships that may unexpectedly arise as you get older. Again, it is hoped that you will not endure a situation like this, but looking into an option like this now rather than later is a good idea and can give you invaluable peace of mind.

You Will Get There, One Dollar at a Time

Saving for retirement does not have to be a stressful process—in fact, your employer may already be willing and able to help you get there. Start by speaking with your HR department about a matching plan and then head to the bank to see about an IRA. These steps, along with looking into emergency options for cash if need be, will help you to plump up your retirement savings and allow you to enjoy your golden years.

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