How to Start Planning for Retirement if You Haven't Already
It’s never too early or too late to start planning for retirement. In fact, the sooner you begin planning, the better off you’ll be.
Related Topics
It’s never too early or too late to start planning for retirement.
In fact, the sooner you begin planning, the better off you’ll be. Here are three retirement planning tips to keep in mind:
1. Start early and save as much as you can.
If you’re under the age of 50, you have plenty of time before you retire. Start thinking about the kind of lifestyle you’d like to live after you stop working or reduce the number of hours you work. Do you imagine yourself owning a nice house on a beach? If so, you’ll need to prepare yourself financially.
Wealth is built by consistently saving and earning compound interest, which is interest earned on your interest over many years. Saving for retirement in your 20s, 30s and 40s will help ensure that you have enough money to live comfortably later in life. If you’re over 50, you have some catching up to do, but it’s not too late and you can still save for a great life after retirement.
Enroll in your employer’s retirement plan (401(k) or similar plan, if available, and opt-in to receive contribution matches if they are offered. Taking full advantage of your employer’s retirement plan is a great way to boost your savings.
You can also save independently (if you don’t have a workplace savings option or want to save in addition to your office’s retirement plan) by contributing to an Individual Retirement Account (IRA). Within IRS limits, you can either contribute to your IRA before taxes and pay taxes on withdrawals in retirement (a traditional IRA), or contribute money after taxes have been deducted and withdraw contributions and earnings tax-free in retirement (a Roth IRA).
2. If you didn’t start saving for retirement right away, it’s still not too late to start.
So you didn’t start saving for retirement in your 20s, that’s okay! You can join your employer’s 401(k) or similar plan at any point, if one is offered. Just notify the Human Resources or payroll department, and they will give you the information you need to get started.
If you want to open an IRA, you can start your account any time. Choose a provider that works for you. A good rule of thumb is to look for an IRA with fees below 1 percent. You can choose an online broker and make your own investments, or you can get help and use a service that builds and maintains a diversified investment portfolio for you.
Most savers are well-served by investing in a no-load, low-cost, broadly diversified mutual fund targeted at their expected retirement date. Target date funds are designed to be “set it and forget it” investments, taking greater risk with higher potential payoffs early on, but becoming more conservative the closer you get to retirement when you depend on the money. You can open an IRA at a bank, brokerage or mutual fund.
Another trick is to increase your contribution rate with each pay raise. The more money you make, the more you should save.
3. If you’re over 50 years old, it’s STILL not too late to start saving for retirement.
If you’re starting your retirement savings later on in life, you still have time. Retirement plans offer special benefits called catch-up contributions for people who start saving for retirement after the age of 50. Take advantage of the working years you still have and maximize your contributions.
Your 401(k), if you have one, allows you to save an additional $1,000 each year if you’re over 50 years old. You can also contribute an extra $6,000 as catch-up contributions into your 401(k) in 2018 That means you can save up to $24,500 instead of the standard $18,500 limit for retirement.
Try to work overtime so you can make more money, or consider working a part-time job that’s not strenuous. The more money you make, the more you can set aside for retirement.
Planning for retirement might seem confusing, but once you get the ball rolling, you’ll see it’s not so bad. Set a goal, make a plan and save automatically. Take the America Saves pledge and make a commitment to save money today. We’ll give you reminders and helpful information to help you stay on track.
Let America Saves help you save money and plan for your retirement. It all starts when you make a commitment to yourself to save. Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. And it doesn't stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of us as your own personal support system.
Check out these related insights!
Related Tags
CHECK OUT OTHER SAVINGS JOURNEYS FROM SAVERS JUST LIKE YOU
Saving Early: Key to Successful Future
By Johnnie Lovett
For Johnnie Lovett, a Young Illinois Saver, saving has been a habit since he was a teenager. “As a teenager, I was responsible for buying certain things with my allowance,” the Illinois State University junior said.
Budget like Nohemi
By Nohemi
Nohemi found out about America Saves a few years ago as an undergraduate at the University of Illinois at...
Another Dream Realized
By Mary Brown
Mary Brown was already a disciplined individual when she came to Wisconsin Saves coordinator Wisconsin Wo...
Taking Steps Toward Financial Fitness
By Nicky Vasquez
Nicky Vasquez learned about Virginia Saves when she attended her first class with Bank On Virginia Beach....
Saver Story: Set a goal, make a plan!
By Shannon
We've chosen Shannon as our Saver of the Month! Her approach to saving for her family’s dream home is a g...
Developing a Savings "Game Plan"
By Eunice Diaz
Eunice Diaz, a teacher in Colorado Springs, had been noticing a pattern. Despite the fact that she and her husband were “making good money,” they were spending their entire earnings and “were still struggling at the end of the month.”
Saving for a Bright Future
By Kristin Hendricks
Kristin Hendricks, a single mother from Texas, understands the importance of saving money and following a...
Put 20 Percent Away
By Melissa
“I am a single mother, and I make ends meet for me and my daughter, but I wanted to put money away for my...
Transforming “I Can’t Save” to “I Will Save”
You will not believe what it took to completely change my life. About three years ago, the HR Administrat...
A Think Like A Saver Attitude
By Melissa
Melissa has always been thrifty with a #ThinkLikeASaver attitude. This served her family well when her hu...
A Think Like A Saver Attitude
By Melissa
Melissa has always been thrifty with a #ThinkLikeASaver attitude. This served her family well when her husband lost his job in 2014. Using their savings, Melissa’s family stayed afloat while her husband found a new job.
Jump-Starting a Financial Makeover
By Nichelle Johnson
Nichelle Johnson, a single mom with two teenage children, knows what it’s like to stretch a dollar. When she moved back to Virginia Beach in 2008, she provided for her family with just a part-time library position.
Saving is a Family Affair
By Jeff
Saving is truly a family affair for Jeff’s household. During America Saves Week 2019, he pledged to save ...
A Think Like A Saver Attitude
By Melissa
Melissa has always been thrifty with a #ThinkLikeASaver attitude. This served her family well when her hu...
Don’t Laugh at Saving Spare Change
By Brittany
Virginia Saves saver, Brittany, decided to start saving again when she became a single mother. She thinks...
Put 20 Percent Away
By Melissa
“I am a single mother, and I make ends meet for me and my daughter, but I wanted to put money away for my...
Budget like Nohemi
By Nohemi
Nohemi found out about America Saves a few years ago as an undergraduate at the University of Illinois at Chicago. She remembers attending a University of Illinois Saves event where she decorated a piggy bank and took the Pledge, but college life made her put the thought of saving at the back of her mind.
Saving is a Family Affair
By Jeff
Saving is truly a family affair for Jeff’s household. During America Saves Week 2019, he pledged to save ...
Saving With My Boys
By Kelly
Kelly has made saving a family effort. She started her boys saving early. “Probably 3,” Kelly told us, “w...
Starting and Continuing a Personal Finance Journey
By Kiara Hardin
When Kiara Hardin, now a junior at Western Illinois University, became an intern with the Chicago Summer ...
Put 20 Percent Away
By Melissa
“I am a single mother, and I make ends meet for me and my daughter, but I wanted to put money away for my...
Taking Back Control Over Finances
By Nadine Bialo
After becoming a Virginia Saver and getting help from BankOn classes and coaching, Nadine Bialo took back control over her financial affairs.
Developing a Savings "Game Plan"
By Eunice Diaz
Eunice Diaz, a teacher in Colorado Springs, had been noticing a pattern. Despite the fact that she and he...
Inspired to Build Savings By Starting Small
By Sharon
With little-to-no money in the bank and living on a limited income with her adult daughter, Sharon wasn’t...
Getting Out of Debt
By Tonya Shelton
In 2004, Tonya Shelton was facing financial ruin. Barely making more than minimum wage and having lost he...
From Overwhelmed to In Control
By Debi
In 2017 Debi felt overwhelmed. Her credit cards were maxed, and she wasn't exactly sure how to handle it....
Savings #ImSavingForSweepstakes
#ImSavingFor Winner Story
By Pedram R.
America Saves awarded one lucky saver, Pedram R. from California, $750 for sharing his #ImSavingFor story. Pedram said, “Saving is important to me because it proves I am not willing to buy unnecessary things to please others or to be perceived as successful.”
Saving is a Family Affair
By Jeff
Saving is truly a family affair for Jeff’s household. During America Saves Week 2019, he pledged to save for retirement. But making a commitment and creating a plan to save isn’t a new concept for him.
Getting Out of Debt
By Tonya Shelton
In 2004, Tonya Shelton was facing financial ruin. Barely making more than minimum wage and having lost her home to an unexpected family crisis, Shelton and her family were forced to live in a rundown hotel.
If we feature you in our newsletter, you get $50.
You May Also Be Interested In...
Take the America saves pledge
Make a pledge to yourself and create a simple savings plan that works. Complete the Pledge and America Saves will send you short email and text reminders, resources and tips to keep you on track towards your savings goal. Become part of an entire community of savers. Get started now!
creative ways to fund your savings
Those with a savings plan are twice as likely to save successfully. Taking the America Saves Pledge is a pledge to yourself to start a savings journey and America Saves is here to encourage you along the way. Take the first step toward creating a better financial future. Make a plan, set a goal, and pledge to yourself to start saving, today.
Congrats on completing the pledge!
Congrats on completing the pledge!
We are so glad you have started your savings journey and Military Saves will be right beside you the whole way! You will soon receive an email from the Military Saves team to help encourage you. Find helpful links below to continue researching topics on saving.
Take the America Saves Pledge
Make a pledge to yourself and create a simple savings plan that works.