Don’t call it a day until you can pay. More than two-thirds of workers in the private sector have employer-sponsored retirement benefits.
Yet many Americans do not retire until they are very old, if ever. One reason why is that you have to save for retirement, which can be tricky.
How can you make the first steps toward retirement? What sorts of accounts should you open up? How can you address your current expenses?
Answer these questions and you can rest easy after your years of employment. Here are five tips you should follow.
- Set a Goal
Retirement planning works best when you have something you want to plan for. You may want to save up money so you can buy a house. You may want to have a million dollars when you turn 65.
Whatever your desire is, you should build a goal around that desire. You can then think of the steps you need to take to reach that goal.
- Start Saving Now
Future planning involves work now. Talk to your financial advisor and get a good impression of how much money you have on hand. Figure out the daily expenses you need to cover and then save the rest away.
Think about saving a little bit of money every year instead of a lot of money during one year. Making small contributions through time will let you build financial skills.
- Open a Retirement Account
There are a few accounts you can open to help with saving for retirement. A 401(k) is an employer-sponsored account that lets you save portions of your salary. You can decide how you want your money invested, including through mutual funds.
An IRA is an account you control. It is a good option if you are self-employed or if you cannot contribute more to your 401(k).
- Diversify Your Investments
Whatever account you open, you need to make sure your money is safe. Spreading your money across several different industries will protect you because you will always have multiple income streams.
You can pursue many different investment opportunities, including in gold and precious metals. You should visit websites like the Rare Metal Blog to read some information before making an investment.
- Address Your Debt
Debt is your biggest obstacle to retirement planning. Interest rates can become substantial and prevent you from leaving work early.
Take care of your debt as soon as possible. Develop a payment method that lets you get to the debts with the highest interest rates first. Then pay off the rest one by one.
Figure Out How to Save for Retirement
You must save for retirement well before you leave work. Set a goal for when you will retire and what you will do. Then start putting some money away right now.
You can open up a 401(k) and an IRA. Make sure you spread your investments out across different industries.
If you have debts, you need to think of a way to pay them off. Take care of the one with the highest interest rate and work your way from there.
Saving for retirement is one smart finance strategy. Read more finance guides by following our coverage.