Start Your Retirement Savings With These Top Tips

Retirement is not something that many put thought and effort into. They believe they can think about it when they get older or that their employer will save aside money for them. This can cause financial difficulties when it comes to retiring.

If your employer has a retirement plan, then work with it as much as you can. If you ever have the money to spare, then stick it in your retirement plan. An employer’s retirement plan is a great idea because there will be much lower taxes and the employer may match your savings as well.

Start thinking about how you want to live when you retire years before you actually do retire. Make yourself a checklist detailing what you want out of retirement. What do you want your lifestyle to be like? How do you want to feel? Start thinking about retirement now so that you can plan on how to achieve those things.

Does the company you work for have a retirement savings plan in place? Make sure you put money toward that. It’s a win-win situation, as you will have money for your future and you can lower your taxes at the same time. Get the details on whatever plan is offered and figure out how much you want to put in.

Consider downsizing in retirement. When it’s just you and your spouse, you no longer need a large home and two car payments. When you downsize, you can reduce your monthly debt which makes it easier to enjoy retirement more. Consider an apartment, town home or even a small single family home that will adequately meet your needs without breaking the bank.

To get a good feel for how much money you should be saving for retirement, plan the money you need based on money you spend now. Your estimated expenses will probably be near 80 percent of the current level because you will not have the travel expenses of work. Just know that you shouldn’t be spending money as a free time activity.

Don’t burn any bridges in your career as you face retirement, because situations can change quickly! While it may feel good to tell your boss how you’ve really felt about him all these years, you may need to go back to work part-time and will want good references. Think first before you sign-off on opportunities.

Do the math and figure out how much money you need to live. If you ever hope to live without working, then you’ll need to have that money saved ahead of time in your retirement plan. Figure out how much it costs you to live comfortably and this will give you some form of saving goal.

Once you retire and are trying to make your money go farther, downsizing is something to consider. Even if you’re not someone with a mortgage, you will still have expenses to pay, like your electricity and landscaping. Think about moving to something smaller. Downsizing can save you money, limit the maintenance costs and allow you the freedom to travel.

Be sure to ask your employer about their pension plan. Though you may not think much about it when you are younger, this will become a big deal when you are older. If you are stuck with a shoddy pension plan, you may find it hard to pay your bills once you are retired.

Be sure that you enjoy yourself. Though your schedule and options have changed, you need to find happiness in each day. Look for new hobbies and other activities that make you happy.

If you’ve realized that your retirement income won’t be up to snuff, consider taking on a part-time job once you retire. This will keep you busy so you don’t end up bored, plus the extra money can be a huge help without wearing yourself out at a full-time job.

Look into reverse mortgages. A reverse mortgage lets you stay in your home but take out a loan based on the equity in your home. This money does not need to be paid back, but is collected from your estate when you are gone. This will help to increase your savings.

The best way to save up for retirement is to put money away starting when you are young. With compound interest the money increases based on what is in the account, so if you have $10 and add $1, the next year the interest will be based on $11 instead of $10.

If you are looking for a way to save for retirement without paying taxes on your withdrawals, consider a Roth IRA. While you don’t get a tax write-off when you make a contribution, you don’t have to pay a cent when you make a withdrawal, which is worth it in the end.

Keep in mind the magic age of 70.5. At this age it’s mandatory that you take minimum distributions from your IRAs and any work retirement funds. If you don’t do so, you could get some incredible steep penalties, as high as 50% of the total that should have been withdrawn during that month.

If your company offers a retirement plan, look into it. Often, employers will match the funds that you put into these plans. In the long run, it is certainly worth the investment. Make sure that you only invest the amount of money you can. Stiff penalties may be applied otherwise.

A traditional IRA is a great way to save for retirement. This investment lets your money grow with taxes only paid on withdrawals, meaning you don’t pay anything until you start taking money out. When you make a contribution you can deduct that money from your income taxes as well.

Does your employer match funds when you contribute to your 401K or another retirement plan? If so, take advantage of that because it will only help you in the end. The plan itself may not be the best, but the matching funds will certainly more than make up for anything else.

Retirement can bring time to relax and enjoy life, but only if good retirement plans have been made. What steps have you taken to ensure a good retirement? This article was a great start, but drafting your plan is now a must.

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