Unfortunately, in today’s day and age, we often enter into jobs that don’t offer us pensions or any way to start saving for retirement. That means that many of us are faced with saving up money for our retirement when we are still struggling in heaps of college debt. So what is the age you should start saving? How much should you be saving each month? What options are out there? We will answer all those questions and more in our article today.
When Should I Start Saving?
Right now. It’s never too soon to start saving for retirement. If you have a steady job where you are making a decent income, that is a great place to start. But, even if you are at a job that isn’t your ultimate career choice, you can still put some money aside each month. Though retirement might seem like a far ways off, you don’t want to come to the end of your career and realize you can’t retire because you didn’t save up.
How Much Should I Save Each Month?
That is unique to each person. The best advice I have would be to start saving small amounts each month. If you think about it, even if you only save $100 a month for your retirement, eventually you will be able to invest your money and double that amount. So start by opening a savings account at your bank and committing to putting x number of dollars from your paycheck into this account each month. This will help you get into the habit of saving that money each month. Soon, it will become second nature to you.
What is a 401(k)?
If you work at a company that provides you with health benefits, there is a high likelihood that they would also provide you 401(k) options. What is a 401(k) you ask? This is a retirement plan sponsored by your employer or company, that lets you invest part of your paycheck into your retirement before your taxes are taken out. If this is available to you at your company, I would highly recommend taking them up on it.
What Do I Do If I Don’t Have A 401(k)?
Though many companies do offer 401 (k) options as a benefit, many do not. Or, you could be working a job that doesn’t offer you any benefits. That is not an excuse to stop saving for retirement. So what are some other things you can do instead?
Set Up A Savings Account
This will give you a place to put your money and get you into the habit of saving money each month.
Find a Way To Invest
Once you have a certain amount of money set aside for retirement, you will have the opportunity to invest your money so that you can earn more. Most companies suggest saving up at least $2,000 before trying to invest it. I would recommend getting advice from your bank, a financial planner, or a trusted family member. There are many options available to help people invest their money for retirement that is outside of a 401(k). So don’t start freaking out just yet.
Don’t Just Google It
Though there are some great resources you might want to explore online, don’t get roped into signing up for anything before you weigh all your options.
Consider The Risks
There is a certain amount of risk associated with any significant investment. But, this is also your only option if you want to increase your retirement plans significantly. Most of us are not independently wealthy, so we need to find a way that our money can be doubled and tripled over a period.
What Are The Different Types Of Retirement Plans?
This was something that was entirely new to me a couple of months ago. But there are many options out there for ways you can invest and earn more money for your retirement; the challenge is to pick the best one for you in your current stage of life. If you don’t have a family, you might consider different plans than someone who has a baby on the way. This article provides an in-depth analysis of various retirement plans available, check it out.
Where Can You Cut Back And Start Saving?
Some of you may be reading this article and thinking that you can’t find any spare income to put aside every two weeks for retirement. And, of course, I am not suggesting that you save for retirement instead of paying for your apartment, but we all have little guilty pleasures that we may be able to cut out of our monthly budget.
More on this later, but some quick examples would be:
- Limit online shopping
- Stop buying coffee at Starbucks every day
- Purchase cheaper makeup
- Only go out to eat one night a week
- Pack your lunch for work each day
- Scale back your gym membership
- Make a list and stick to it every time you go shopping
As you can see, this is by far not an exhaustive list, but there are many areas we can cut back on each month. Maybe sit down today and think about what might be able to go and free up some room in your budget.
In conclusion, saving for retirement can be no fun, but it’s also a necessary evil. So take steps today that your future self will look back and thank you for.