With all the other expenses that life brings – such as a mortgage payment, education savings for the kids and the cost of living – retirement savings may not be at the top of your priority list. However, the truth is that everyone should be planning for retirement because we all want to retire someday.
According to Fidelity, Americans are living longer than ever before; this increases the importance of (and need for) retirement savings. According to one recent study, “a man who reaches age 65 today will live (on average) until age 84 and a 65-year-old woman will live to an average age of 86.” Will your current savings support a financially stable retirement?
Regardless of your age or income, you can afford to save for retirement. You just need to know where to look.
Here are four ways to maximize your retirement savings:
Participate in your employer’s retirement plan
The first place to start boosting your retirement savings is with your employer. If your employer offers a matching investment plan (i.e. dollar for dollar or similar) such as a 401(K) or a stock ownership plan, it’s a good idea to take advantage of this “free” money. Employer plans allow contributions to be directly deducted from your paycheck; this helps to ensure continued savings.
Open an IRA
If an employer savings plan isn’t available or if you’ve already maxed out your contributions, the next way to boost your retirement savings is to open an Individual Retirement Account (IRA). Investors have the option between a Traditional IRA or a Roth IRA and a financial advisor can help determine the best investment option for you.
Invest your bonus
There is no easier way to boost your retirement savings than with an unexpected windfall such as a bonus. Of course it’s always nice to have a little extra cash to spend on yourself, but investing in yourself for retirement is a smarter and more responsible financial choice.
Put your tax refund aside
When you invest money that you weren’t expecting – such as a tax refund – you won’t miss it. This makes investing your tax refund for retirement purposes an easy choice. Spending and saving wisely throughout the year with these tax tips can help boost your retirement savings with a tax refund come April.
If you want to start boosting your retirement savings, contact us today to learn how we can help.
Brian Littlejohn is the Founder and CEO of Sherwood Investment Management, a fee-only financial advisor firm in Sonoma County, California. Brian is a CERTIFIED FINANCIAL PLANNER(TM) professional who specializes in investment management. He holds a MBA and a Master’s Degree in Financial Analysis. He has over a decade of experience helping clients achieve their financial goals and occasionally teaches investing and financial planning courses as an adjunct professor.