After what feels like an entire lifetime of hard work and daily grinding to make ends meet, there’s no sweeter thought than being able to sit back, relax, and truly enjoy everything retirement has to offer. In order to turn your dreams of waterfront sunsets and schedule-free indulgence into a very real reality, you need to first ensure you’re setting yourself up for success. Planning for the future may not be the most fun project to begin, but it’s one that offers incredibly rewarding benefits of Save Your Retirement.
Saving up for your retirement isn’t a one-off project you can square away in a few days or weeks—it’s an ongoing investment in your future. Whether you’re just a few years away from retirement or decades away from giving up the grind, there’s no time like the present to begin stashing cash away.
Using this guide, we’ll walk you through 5 unique ways to save for your retirement so you can enter your best years with a bank account that looks as good as retirement feels.
How much do I need to save for retirement?
Before we take a deep dive into our best tips, it’s important to first establish a few key goals that effectively guide your retirement saving efforts. Understanding how much you need to save for retirement can be a bit tricky, especially if you’re dozens of years from entering that phase of life.
While the amount will change per person, the general rule of thumb is to save at least 15% of your pre-tax annual income each year. When you factor in added benefits like Social Security or retirement plan payouts, your final retirement budget will ensure you’re able to live comfortably.
1. Take advantage of your employer’s 401(k)
A 401(k) is a retirement plan made available to you by your employer. 401(k)s are designe to assist employees save for retirement and all contributions made to a 401(k) are tax-deferres. This means that the money is directly transferres from your paycheck before any income taxes can be taken out.
For those under the age of 50, you can contribute up to $17,500 a year to your 401(k), and for those over the age of 50, you can contribute up to $23,000. Do note that this retirement saving method only applies to those who are still part of the workforce and are employe by a company that offers a 401(k).
2. Open up a retirement account
Opening up a retirement account is one of the easiest and smartest ways to get a jumpstart on saving for your future. Not only are these accounts tax-advantages. But they’re also home to incredibly attractive interest rates, making them some of the most profitable routes for growing your retirement funds. If you haven’t discovered the wonderful magic known as compound interest, find a compound interest calculator and see for yourself. There are two common types of retirement accounts: traditional IRAs and Roth IRAs. Let’s take a closer look.
Traditional IRA: A traditional IRA allows you to contribute up to $6,000 per year, or up to $7,000 if you’re aged 50 or older. With this type of retirement account, you can deduct your contributions from your annual federal income taxes. This effectively makes your growing funds non-taxable. It is only when you withdraw early that your money can be taxed. So long as you reach the age of 59½, you can withdraw completely penalty-free.
Roth IRA: Similarly to a traditional IRA, a Roth IRA allows you to contribute $6,000 per year, or $7,000 if you’re aged 50 or older. The difference between the two lies in the fact that with a Roth IRA account, you contribute after-tax dollars. You can enjoy the benefit of your money growing tax-free and having the ability to make tax- and penalty-free withdrawals after age 59½.
3. Get a part-time gig for save for retirement
If you’re like most people, you’re likely unable to put away huge chunks of your income toward Saving your retirement . However, if you’re serious about growing your funds and have a bit of extra time on your hands, you might consider suiting yourself up with a part-time gig.
If a part-time job is too difficult to squeeze into your already busy schedule, try going the freelance route.As well as Working remotely allows you to create your own schedule and earn money when you want to. Fortunately, the gig market is booming, and if you have a valuable skill. That people want or need, finding a lucrative side hustle maybe just a few clicks away.
Check out these popular side gigs:
- Airbnb Host
- Virtual assistant
- Online tutoring
- Dog walking
- Customer service representative
Related Article: How to Start as a Freelance Writer
4. Try a retirement savings challenge
Getting into the habit of save your retirement can be difficult if you’re use to spending and splurging your paychecks. If you’re looking for a creative way to spend less and saving more. Trying your hand at a savings challenge is an excellent way to get starte. These fun challenges can be extremely effective in helping. You set and achieve savings goals.Therefore Take the 52-week challenge for example.
The 52-Week Money Saving Challenge: Throughout the 52-week span, you will gradually increase the amount of money that you save each week. In the first week, you’ll save $1. In the second week, you’ll save $2. The third week, $3.Although This progression escalates until the 52nd week. Where you stash away $52 and are left with a lump sum $1,378!
5. Diversify your portfolio with stocks
If you’ve never bothered to look into the stock market, consider this your sign to get started. If you’re at all interested in generating passive income, investing is the way to go. For newcomers, it pays to start small rather than nosediving. And putting the sum of your savings at riskof saving your retirement.
Get smart about investing by downloading these beginner-friendly mobile apps:
- SoFi Active Investing
Set aside all of the money that grows toward Save your retirement. And you’ll be in for a sweet money-making. As well as Treat by the time you’re ready to cash out and quit your day job.
Save today to create a healthier, happier tomorrow. How are you planning and saving for retirement? Which of these methods do you plan on trying? Open up the discussion in the comments below.