10 tips for retirement planning
1. It’s not too early {even if you’re twenty-something}! The earlier you start setting aside some money for retirement, the better off you’ll be when the time comes.
2. When you contribute to a 401k or an IRA, you effectively reduce your tax bill. The amount varies by how much you make, but if you contribute 5k per year and you’re in the 25% tax bracket, you automatically save $1250 on your federal income tax.
3. If you have the option, put your retirement money into a company-sponsored and matched 401k account to maximize the amount of money you can save.
4. No matter where you put your retirement funds, set it up so the money is withdrawn and deposited before you see the rest of your paycheck. This way, it builds over time without you having to do anything.
5. If you’re a young, low-income retirement saver, consider using a Roth IRA. This type of retirement account lets you pay income tax on your contributions at your current tax rate. Even if you begin to earn more later on in life, your withdrawals in retirement will still be tax-free.
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