5 Simple Ways to Boost Your Retirement Funds
Your financial stability and taking care of your family should be top priorities regardless of your age. For those who are nearing retirement — or wanting to plan well ahead — there are simple steps you can take to protect your financial stability when the time comes for you to retire. When you plan ahead and ensure that your family is taken care of, you can fully enjoy your retirement when you're no longer working a full-time job.
The Importance of Saving
The cost of living is only getting higher, and when you're retired, you're living on limited income. That’s why allocating financial resources for your retirement is essential. Once you leave full-time employment, you don’t want to worry about where you'll get money to pay your bills and daily living expenses. With that in mind, here are five ways to start saving for your Golden Years:
Increase Your 401(k)Many companies will match a percentage of an employee’s 401(k) and retirement plan contributions — some even match your contributions dollar for dollar! Slowly increase the amount you're putting into your retirement funds with each paycheck, and you’ll reap more benefits from your company’s match. One perk of your 401(k) is that taxes on the account are deferred until you're retired. This way, you aren't paying taxes or interest on the funds you accumulate until you begin to receive payouts.
Open a Line of CreditWhile it seems counterintuitive to take out a loan or line of credit to help boost your retirement funds, it’s actually a viable way to save money. By taking out a HELOC (home equity line of credit), you can pay for home upgrades or other expenses without tapping into your retirement accounts. This way, you won’t pay hefty fees for taking out your retirement funds early — ideally, you’ll pay off the HELOC before retirement.
Consider Traditional & Roth IRAsTraditional and Roth IRAs (individual retirement accounts) offer another secure way to save money for retirement. Both allow contributions of up to $5,500 annually (+$1,000 more if you are nearing retirement age). The main difference between the two is that a Traditional IRA is funded with pretax dollars, while Roth IRAs are taxed up front. One major benefit of the latter is that you don’t have to worry about increasing tax rates, since you’ve already paid taxes on the money you deposit.
Monthly Saving IncreasesIf you can find ways to save a bit more on a monthly basis, do so. Some suggestions include:
- Dining out less often
- Create a habit to dedicate a portion of each paycheck to retirement planning
- Budget well and don't spend past your limit
- Use coupons and look for savings on items you buy regularly
Use Your Financial Advisor as a GuideAn experienced financial advisor can be immensely helpful when designing your personalized retirement plan. At Desert Financial Wealth Management, we’ll work with you and your family to create a budget and plan that fits your needs and lifestyle. From helping you choose retirement accounts to finding creative ways for you to increase contributions, a financial advisor can guide you through everything you need to know about retirement planning.
What it Means in the Grand Scheme of Things
Retirement savings are imperative to your financial stability and success when you're no longer working. Our five simple tips can help you plan for your future and ensure comfortability in your Golden Years. By thinking ahead, you’ll be more likely to be able to relax and enjoy your retirement, rather than worrying about whether or not you have enough funds saved to carry you through.
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Desert Financial Credit Union, Desert Financial Wills and Trusts, Desert Financial Insurance and Desert Financial Wealth Management is not a registered broker/dealer and is independent of Raymond James Financial Services, Inc.