Saving for retirement is a difficult task for most Americans. You probably have pressing financial concerns that feel more urgent than saving for the future. For example, you may be struggling with debt or paying for your child’s education. You may feel like you have plenty of time to save, but the truth is that the earlier you start saving, the easier it will be to hit your objectives. Time is a valuable asset when it comes to retirement planning. If you start saving early, you give your assets plenty of time to grow and compound, which could help you accumulate more money. Below are a few tips to help you boost your retirement savings. If you haven’t started yet, or if you feel like you’re behind, now is the time to take action and increase your savings. A financial professional can help you create a plan. Do you contribute to your employer’s 401(k) plan? These plans are popular for a few reasons. They offer tax-deferred growth, which means you don’t pay taxes on your gains as long as the funds stay in the account. That tax deferral may allow your funds to compound at a faster rate than they would in a similar, taxable account. Many 401(k) plans also offer employer matching contributions. For instance, your employer may match every dollar you contribute up to a certain level, such as 3 percent of your salary. Consider contributing at least enough to take advantage of the employer match. It can be an effective way to boost your savings rate with someone else’s money. Contribute to an IRA. Your employer’s retirement plan isn’t the only tax-deferred account you can use. You can also contribute to an individual retirement account, or IRA. There are various types of IRAs, but all of them offer tax-deferred growth. Some IRAs offer other tax benefits, as well. For example, the traditional IRA allows you to deduct your contributions, assuming you meet income limits. You can’t deduct your contributions to a Roth IRA, but you can take tax-free withdrawals after age 59½. Consider using an IRA as an additional account to save retirement funds on a tax-favored basis. Automate your savings. Many people don’t save enough for retirement because they simply choose to use their money on other priorities. Other bills or expenses may feel like higher priorities than saving for retirement. You can avoid this risk by automating your savings. Treat your retirement savings like a mandatory bill, and set up automatic transfers to your IRA or other accounts. Once you take choice out of the equation, you’ll likely see your retirement balances increase quickly. Make catch-up contributions. Are you age 50 or older? If so, the next few years may be your best chance to save for retirement. Fortunately, you can take advantage of catch-up contributions to put away more money. In 2018 you can contribute as much as $18,500 to a 401(k) and $5,500 to an IRA. If you’re 50 or older, however, you can contribute an additional $6,000 to your 401(k) and an additional $1,000 to your IRA, bringing your total contributions to $24,500 and $6,500, respectively. Look at your budget and find ways to take advantage of these additional contribution limits.1 Wait to file for Social Security. Finally, you may want to consider a strategy that doesn’t necessarily boost your savings but does boost your retirement income. If you can delay your filing for Social Security benefits past your full retirement age (FRA), you could increase your benefits. Social Security offers a permanent 8 percent benefit credit for every year you wait past your FRA, up to age 70.2 That extra income could help you enjoy more financial stability in retirement. Ready to boost your retirement savings? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation. 1https://www.forbes.com/sites/ashleaebeling/2017/10/19/irs-announces-2018-retirement-plan-contribution-limits-for-401ks-and-more/#7e363e0925ac 2https://www.ssa.gov/planners/retire/1943-delay.html Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 17698 - 2018/5/30
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