If you read my last article about how most people don’t have anywhere near enough money saved for retirement then you probably want some solutions. Well I am here to share with you an article I read that has some amazing ideas!
Here’s a fair few of some amazing ideas. Make sure you read the whole article to get the full list! This way you can start shoveling money into accounts for retirement now!!
Put 15 percent of your salary in savings.
Ideally, you’ll start doing this with your first paycheck. If 15 percent feels like a big number, start small and gradually increase the percentage over time. The more time you have to save, the longer the money has to accumulate and earn compound interest.
Set up an automatic direct deposit into an IRA.
The easiest and least painful way to start saving is to put your contributions on autopilot. You can even automatically schedule incremental increases over time. We promise you won’t feel a thing.
Consider investing in a Roth IRA if you’re in a low tax bracket.
A Roth IRA taxes you based on your current tax bracket, but any future withdrawals aren’t taxed as long as you meet certain contributions. Roth IRAs are smart retirement investment choices for young professionals who are in the beginning stages of their careers with lower salaries. They fall into the lower tax bracket and will not have to pay based on the higher tax bracket they might enter as they advance in their careers.
Take advantage of higher IRA contribution limits for older savers.
People who are 50 years old or over at the end of the calendar year can make additional, or “catch-up,” contributions to their IRA accounts. For 2014, the limit is $5,500, and in 2015 it’s $6,000.
Conduct an annual audit of your retirement account fees.
A fee increase of just 1 percent to 1.5 percent could amount to thousands of dollars over the course of a year.
Don’t make early retirement account withdrawals.
People who withdraw from their retirement accounts before age 59 ½ are subject to a 10 percent penalty fee, as well as tax on the income. There are a few ways you can avoid withdrawal penalty fees such as using IRA distributions to pay for medical insurance and expenses, college costs or your first home.
Delay social security payments for as long as possible.
Retiring at age 62, the youngest age you can qualify for social security benefits, will decrease your social security benefits by about 25 percent. If you wait until the full retirement age, 66 or 67, you’ll receive 100 percent of the benefit. If you delay your retirement beyond your full retirement age, your benefits will be increased by a certain percentage until you reach 70.
Retire in an inexpensive location.
A simple Google search can reveal the best places for people to retire, both in the U.S. and overseas. The right location can reduce living expenses and taxes, allowing you to keep more money in your retirement fund.
Shop around for better rates on auto, homeowners and health insurance.
Some insurance carriers offer discounts to long-term policyholders, but that doesn’t necessarily mean you’re actually saving money. Do an annual audit of your insurance expenses, and shop around to make sure you’re getting the best deal available.
Share a car with your partner or spouse.
Many couples might find they can get around just fine by sharing one car, which cuts down on gas, maintenance and insurance costs. Retirees might be able to forgo car ownership altogether by using ride and car-sharing services, or maybe even self-driving cars.
Use senior citizen discounts.
Aside from growing wiser, one of the biggest perks of getting older is taking advantage of senior discounts on everything from movie and airline tickets to cell phone plans and restaurants.
Consolidate if you have multiple IRAs.
If you’ve got a bunch of IRAs floating around, consider consolidating them into one, easy-to-manage account. But if some of them are Roth and some are traditional, get professional advice before you start converting — you might take a tax hit that sacrifices your savings
Put every tax refund into savings.
It’s tempting to use the extra money from your tax refund on a new toy or vacation, but these spurts of cash provide the perfect opportunities to give your retirement savings a big boost.
Cut the cable cord.
Cable television is no longer an essential utility; it’s an overpriced and unnecessary service. MarketWatch has an interactive cord-cutting calculator to help you determine just how much you can save by ditching your cable bill.
Exercise, eat well and take care of yourself.
According to Fidelity’s 2014 Retiree Health Care Cost Estimate, a couple that retires today at 65 will incur $220,000 in health care costs during retirement. And that doesn’t include in-home, nursing home or long-term care. Taking care of your health early in life can help cut down on these costs.
Learn to stick to a budget.
Think of a budget as an action plan, not a deprivation plan. It’s not about how much you can afford to spend; it’s about how much you can afford to save.
Pay off credit card debt as soon as possible.
Whether you decide to pay off your highest rate first or start with the card with the lowest balance, you should pay off that debt if you want to make any headway on your retirement savings goals.
Invest your holiday bonus.
If you receive a holiday bonus each year, turn that money into the gift that keeps on giving by putting it right into a retirement account.
Start small, and slowly increase your savings rate.
Start with $100 a month, and aim to double it after a year, and the year after that, and the year after that…
Be realistic about your returns.
Ignore tall tales of 20 percent returns — it’s completely unrealistic to expect that from your retirement savings. The longer you have your money invested, the more likely you will see average returns.
Build your risk tolerance.
If you’re worried about losing money in the stock market, pick a target-date retirement fund with a date that is earlier than you plan on retiring. The plans automatically adjust based on which year you plan on retiring. Set your retirement date earlier to lower your risk, and set the date back as you get more comfortable.
Don’t forget to factor in inflation.
Today’s cost of goods and services will mostly likely not be the same when you retire. When you think about how much money you need to retire, make sure to adjust your estimated living expenses for inflation.
Stop saving for college.
Parents often make the mistake of sacrificing their own retirements to save for their children’s education. Stop contributing to a college savings account until you are caught up on your retirement savings goals. Remember: Your child has the option to get a student loan, but you won’t be able to get a retirement loan.
Say “no” to a new car.
Auto loan rates are low and shiny new cars are tempting, but a new car is not an investment — it’s an expense. Cars quickly depreciate and have high operating expenses. Instead, buy a used car, and drive it down to its very last mile.
If you’re going to get serious about saving, you need to educate yourself. Learn about investing and asset allocation by reading books, articles and trusted financial websites and blogs. The more you know, the better choices you’ll make.
I can’t stress enough how important it is to start saving! Make sure to do that, and share! I want to help people realize retirement isn’t far off and you need to start right now!