While most experts recommended beginning early, it is never too late to begin saving for the golden years. Developing a sound to maximize your savings is easier when you know where to begin. These tips can help find a starting point for creating an effective savings strategy. We spoke with Steven A Suib at Preservation Wealth Management about some quick tips to help you start saving for retirement.
Make a Budget
A budget is one of the most useful tools available to find extra savings retirement. To make a budget,track expenses for a month, and look at each item purchased after the month ends. Eliminate unnecessary items, or find affordable alternatives, to find extra money to put into a retirement fund.
Generally, saving at least 15 percent of each paycheck provides enough for a comfortable retirement. Saving raises, bonuses and other unexpected funds significantly increases the amount available for living expenses after leaving work.
Develop a Strategy
Retirement planning is simple with a reliable strategy to accumulate wealth and increase savings. Along with savings from a salary, consider life insurance, taxes and how they impact the ability to save, and which tools are the best for increasing wealth over time.
For instance, comparing investment products like 401k account and IRA accounts allows investors to choose the plan with the greatest returns and lowest risks. An investment advisory service may help you find solutions and strategies to prepare for the years ahead.
Cover Living Expenses
An emergency, such as an unexpected illness or career change, can have a significant impact on retirement savings. To create a plan that covers basic expenses, create a separate savings account that covers at least three months of expenses. Investing more in an emergency fund is recommended to provide funds for more expensive emergencies, such as lengthy medical treatments or long-term unemployment.
Paying off debt is recommended to increase savings and prepare for emergencies. Debts make dealing with emergencies more difficult, especially when debts are sent to collections or garnished from wages. Debts, such as credit card debts, also make saving for retirement more difficult.
Aim to pay off debts at the end of each month, and put as much as possible toward larger debts like mortgages to reduce the amount of interest paid each month. Debt repayment plans are available, but can have higher interest rates. Debt counseling is an option to find simple strategies to reduce debt and prepare for emergencies.
Protect Financial Investments
Financial products like annuities and bonds are provide reliable income to save for retirement. Products like bonds also help protect retirement savings in emergency situations by providing extra income for expenses until the situation resolves.
To maximize income from investments, set annuities to an automatic withdrawal plan to ensure the funds are liquid, or readily available, in emergency situations. Choosing a life insurance policy that offers low-interest loans also provides some income during emergencies, but remember the loan amount must be repaid through regular payments.
Some investments, such as stock market investments, have highs and lows that fluctuate over time. Sometimes, it is difficult to allow fluctuating investments to remain untouched if it appears the investment is going to result in a loss, but cashing out an investment prematurely is rarely advised.
Instead, allow the investments to fully mature to gain maximum returns. Working with a reliable stock market or financial adviser can help determine when investments are mature, and when to avoid cashing out because of normal market fluctuations.
Late Career Savings Plan
Saving early and saving more is the motto for retirement planning, but those who are nearer the end of their career can successfully save enough to provide a comfortable retirement. Late-career savings plans are a little more strenuous than those starting earlier, but are possible by investing more each month, eliminating debt as quickly as possible and sticking to a tight budget to maximize savings.
For more information and advice on how to do these things, contact Steven A. Suib over at Preservation Wealth Management.