Growing your retirement fund is an important part of setting yourself up for a bright financial future. By putting aside a percentage of your income toward investments, you develop a passive income that can support you in your golden years. Even if you are experiencing financial strain in other areas of your life, it is still important for you to think about your retirement. Check out the tips below to get started:
1. Begin Now
It’s okay if you have not contributed to your retirement fund --- the most important thing is to start now. No matter your income level, you can set the intention to save money for retirement. The advantage of starting now is that you maximize your input. In other words, the longer your money sits in a retirement account, the greater the increases for you in the long term. Check out a retirement calculator to help you understand how your money can grow.
2. Take Advantage of Employer-Sponsored Programs
Do you work for a company or non-profit? Ask your human resources manager if your employer sponsors a 401(k) program. 401(k)s are the most common form of retirement accounts --- these accounts allow you to save a percentage of your income before taxes. Some employers also offer matching programs. Your employer may match your contributions to your 401(k) up to a certain dollar. Take advantage of these programs! They can have a powerful impact on your savings in the long term.
When utilizing a 401(k) plan, you do not have access to your invested money until the age of 59 or after 55 if you have already left your employer. If you dip into your investments before that time, you will be charged a 10% fee on top of the taxes you will have to pay on your withdrawn money. If you work for the government or a job connected to a strong union, you may also be eligible for a pension. These plans do not require contributions and are extremely beneficial, but experts recommend contributing to a 401(k) even if you are eligible for a pension.
3. Automate Your Contributions
When you set up a retirement account, automate your weekly or monthly contributions. This extra step ensures that you naturally allocate money, rather than needing to complete the task manually. You will get used to your regular contributions, rather than feeling hesitant about saving your money. Commitment is the key to a successful retirement fund --- you are on your way!
As you grow your retirement fund, make sure to affirm how much abundance these contributions will bring to your future. They will compliment social security benefits, offering you a more secure financial foothold. Feel empowered knowing that you are taking a positive step for you and your family!
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