It’s the beginning of a New Year, and while you are considering your array of options for New Year’s resolutions, don’t forget that it’s the perfect time to reflect upon your personal finances too. Now is the time to check and see if your daily savings and spending practices are setting you up to meet your retirement goals. Here are some realistic retirement resolutions that can help you save more money in the upcoming year.
Stash your raise. If you are still working, and get a raise or cost of living adjustment in 2017, make the goal to save it. If you’re not in the position to save your entire raise, try to set aside a portion of it for retirement. Given that you are not used to living on that money, it should be relatively painless to make the additional contribution to your retirement fund without feeling any effect on your living expenses.
Invest the unexpected. When you receive unexpected cash such as a bonus, tax refund or inheritance think about investing it instead of spending it. It is best to be able to meet all of your day-to-day financial goals out of your salaried income and plan to have any bonuses go straight into your retirement savings account.
Learn about tax breaks. Familiarize yourself with the tax breaks that can help reduce your tax bill. Saving money in a traditional 401(k) or IRA can help reduce your taxes, and saving in a Roth account can eliminate the need to pay taxes during your retirement. Meet with a financial advisor to discuss your needs and learn more about the options available to you.
Take advantage of your 401(k) match. Saving for retirement is easier when your employer helps out. If your company provides a 401(k) match, make sure you withhold enough for your retirement account to claim the employer contributions.
Save a little more. Even small increases to a retirement account can add up to a significant amount by the time you retire. Increasing retirement contributions can seem overwhelming, so try to keep things more manageable with smaller but regular increases. Consider contributing an additional $10 - $20 a month. Every little bit will help you reach your retirement goal.
Shift debt payments to savings. When you finally pay off the car or house loan, credit card debts or other past purchases, consider putting the money you used to spend on debt payments into your retirement savings account. If you redirect the same monthly payment, your cost of living budget won’t feel any different, but your savings goals will see a substantial increase.
Sock away side income. Don’t let a lower income limit your ability to save for retirement. Consider using a side job as an opportunity to save additional money. Having a supplemental money making source is a great way to increase your retirement fund, and it could be an enjoyable and rewarding activity if you can build it around one of your hobbies or passions.
A little extra planning and goal setting now can send you well on your way to a successful year of retirement savings…and you can feel satisfied knowing you have a whole list of New Year’s resolutions that you didn’t break!
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