As soon as you can! Without mincing words here, the sooner you can get saving to retire the better. For many of you out there, this might seem like a long distant future, but time has a way of catching up with us. On top of that, despite retirement age increasing, pensions are not necessarily as lucrative as they once were.
There’s no time too soon to begin the process of saving up. For many of us, a truly early start is a little unrealistic as we are spending money on other things in our younger years. Starting to save at 20 would be ideal, but many of us have college fees to pay, plans to go traveling, and a whole lot more.
Take a look though; if you were to start saving at 25 once your college is over, you could be retirement ready very quickly. Putting $3000 a year into a retirement account for ten years, you wouldn’t even need to save after that as the investment grows itself. You could simply check into a senior living Thousand Oaks assisted living home and be sorted!
Leaving it until later
You could make the same investment plan as mentioned above but do it later. If you start the same plan but don’t begin until you’re 35, the returns will be far smaller. While you will have a decent nest egg to sit on, starting a decade beforehand will give you so much more to retire with, but both are better than nothing.
Another reason to consider starting to save as early as possible is that you can get several tax relief boosts for doing so. Government pensions will have longer to grow the sooner you start to contribute to them, so make sure you’ve got a job that takes this into account. You should always check this when taking on a new role.
One of the other aspects to consider if you’re putting on pension saving is that, if you’re in your 20s or 30s now, you’re likely to have a longer retirement. Despite the age of retirement increasing rapidly, you’re still expected to have a longer life expectancy it’s because of exactly this reason why the retirement age is on the rise.
With a longer retirement period, you will need to have more money to support yourself through it. The longer you wait to start saving, the more funds you miss out on creating. Essentially, for every decade waited you miss out on a rather large portion of potential savings. We really can’t emphasize this enough how important it is to get saving right now!
Where to save your retirement money?
So, we’ve convinced you to get saving, but where to do it? Well, there are a ton of different options out there, all designed to help you out. Take a look at IRAs or 401(k) accounts, both of which are the best places to store your hard-earned cash for the future. There are different features and plans available so see what fits!
How to start saving for retirement
Now you’re ready to start saving for retirement and have opened a suitable account to do so, it’s time to consider how you are going to start saving. Take a look at your income and outgoings to determine how much you can comfortably save towards retirement each week or month. Bear in mind that it’s always better to save an affordable amount rather than trying to save as much as possible – you are not trying to leave yourself short on cash here. If you start to save for retirement earlier in life, even putting a small amount each month aside will certainly add up over the years.
Investing for retirement
Along with putting money into a retirement savings account, it is worth considering using some of it to grow your wealth through investing. Today, investing is easier than ever with several platforms that anybody can use to invest in a range of commodities such as stocks, shares, currency pairs, cryptocurrency, and more. Do some research before you begin to find out more about the different options to determine the right one for you, and use a demo account to practice before you start investing or trading. A diverse portfolio of different investment types is the best way to grow your wealth for your retirement.
Retirement saving with your employer
Today, many employers offer a range of retirement-related benefits that you should certainly take advantage of if they are available to you. Opening a retirement account with your employer rather than privately is often a better choice since employers will pay into the account when you do, helping you to save more and grow your retirement nest egg faster.
Freeing up money to save
You want to save up for retirement, but you’re struggling to free up money to save – it’s a situation that you’re certainly not alone in. And as living costs increase but wages do not, saving for retirement is certainly not an easy feat these days. The good news is that there are several options for freeing up your money to save more towards retirement. The first place to start is debt; in fact, you might find it better to pay off debts before you start your retirement savings plan. A good way to do this is by using the debt snowball method. This involves repaying your debts in order from smallest to largest, using the money that you would normally use to pay the last debt you repaid to put towards the next one in size and get it repaid faster. This allows you to repay debts quickly without spending any more each month.
Retirement might seem like a long time away, and even if you’ve got a few decades before you can retire, now is always the best time to start preparing. The earlier you start saving for retirement, the more comfortable you’re going to be when you hit retirement age.