Simple steps to help build your financial foundation.
Although saving more takes some effort, it may be easier than you think – there may even be “free” money available that can help. Here are some tips:
If they’ll match 3%, you’ve just covered 6% of your retirement savings goal when you add in your contribution, too. While the specifics vary, many companies will match whatever you contribute to the retirement plan (up to a certain percentage of your income).
Whether in an IRA, a 401(k) or some other dedicated account, this small change means you’ll be at 15% within 10 years without even feeling it.
See if your employer offers a corporate profit-sharing plan, employee stock purchase plan, which enable you to purchase your employer’s stock at a discount, or employee stock ownership plans, which provides company stock at no cost as part of overall compensation.
Consider saving in a tax-deferred account such as a 401(k) or a traditional IRA. Doing so can cut your tax bill. Contributions to a Roth IRA, by contrast, are not tax deductible, but they can grow tax-free. Earnings may be taxed if withdrawn before you’ve held the account for five years.
This may help you take advantage of potentially lower fees. Don’t assume a bank is your only choice for check writing, and consider applying whatever savings you achieve to your retirement fund.
Schedule automatic monthly transfers from your checking or savings account into your retirement account. This keeps you on track and also ensures that you’re investing consistently, regardless of market fluctuations.*
Careful here – this only works if you diligently pay off the card balance every month.
*This strategy does not assure a profit and does not protect against loss. It involves continuous investment regardless of fluctuating price levels of such securities. Investors should consider their financial ability to continue purchases through periods of low price levels.
Investing involves risk, including the possible loss of capital. There is no assurance that any investment strategy will be successful. Withdrawals from tax-deferred accounts may be subject to income taxes, and prior to age 59 1/2 a 10% federal penalty tax may also apply.
