When you plan for retirement, you’re taking a long distance approach that measures success in very large numbers somewhere decades in the future. But working towards something so distant can be discouraging for those plodding along in the present.
Fortunately, there are immediate steps you can take today to significantly improve your retirement in very real ways. Steps such as:
1. Open an IRA if you Don’t Already Have One
Consider establishing an individual retirement account (IRA) if you haven’t already. Contrary to what many people assume, there is no rule against saving in both a workplace savings plan (401k) and a Traditional IRA—and you can get started with an IRA with a fairly small investment.
You have two IRA options to choose from, as well as a wealth of providers. A Traditional IRA may be right for you if you and/or your spouse has a workplace retirement plan, and contributions to a Traditional IRA are generally tax deductible while the account’s earnings grow tax-deferred until you tap them in retirement. On the other hand, if you make below a certain amount of money and don’t have access to an employer retirement plan, Roth IRAs may be a better choice. In a Roth IRA you pay taxes up front, and then access the account TAX FREE during retirement. Both options are easy to set up, give you access to a wide variety of funds, but have an annual contribution limit of $5,500.
2. Automate your Contributions
Log in to your retirement accounts and set up automatic contributions to grow your nest egg on a predictable schedule without having to think about it. This way you’ll never forget to make a payment or be tempted to take a month off and divert those funds to something else.
3. Double-Check Your Employer Benefits—and Take Them All!
If your employer offers to match your 401(k) plan, make sure you contribute at least enough to take full advantage of the opportunity. This is essentially extra income sitting on the table, ready for you to use. Don’t take the short term approach—put your money AND your employer’s money into retirement! Look up the details today.
4. Make a Weekly Goal
Yearly goals for retirement savings can be abstract and distant, so try to set a smaller monthly savings target. By breaking big goals into smaller monthly or weekly goals spread out over time, your goals seem more achievable and immediate. For instance, maxing your IRA at $5,500 by the end of the year seems a lot more insurmountable than putting away an extra $458 per month or $114 per week.
5. Make an appointment
One of the biggest obstacles to successful retirement planning is the sheer knowledge gap many people run into when it comes to getting started. Retirement is a big question, and there are countless different products, investments, schemes, plans, regulations, and more to consider. If you don’t have a background in finance already, understanding what is actually important and what you have to do to get started can seem impossible.
That’s where we come in. At Heritage Financial Strategies we work with individuals just like you to understand your present finances and your future goals, and give you the guidance and information you need to save, invest, celebrate, and live with financial confidence. Call us today at 480-397- 1184 to make an appointment and get the advice and guidance you need to make the most of your money.