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Simple Hacks to Boost Your Retirement
The things you do now to prepare for your retirement will help determine how comfortably you will be able to spend your golden years. The more you save, the earlier you may be able to retire and start enjoying life the way you always wanted to. No matter what type of industry you are involved in, or whether you own a major corporation or operate your own home business, there are some simple hacks everyone should be aware of to give your retirement a boost.
Why Is It So Important to Save for Your Retirement?
A good retirement plan can help ensure you will live a stress-free life in the future. According to the American Psychiatric Association, around 70 percent of all adults constantly worry about their finances. However, with the right retirement savings in place, you will not allow financial stress to affect your physical and emotional well-being.
Retirement planning is essential in making sure taxes do not exhaust all your savings after you retire. It can help you remain independent, and you will not have to be dependent on others or take on a new job once you retire. Starting a good retirement savings plan now can help you make better financial decisions.
Common Issues We Face When Planning for Retirement
There are several issues and concerns that many people face regarding retirement planning. Of course, longevity is the main concern for most people. We often worry about whether our savings will truly be enough to last the remainder of our lives after retirement. Market volatility can also have a major impact on your savings, and fluctuations in the economy will cause a serious change in your savings and the amount you can contribute over time.
Because of inflation, there will be a rise in the cost of goods every year. You will need to factor in this increase in the price of goods such as food, housing, and transportation to maintain your retirement savings. Taxation also affects your savings based on your assets’ amount and the value of investments.
Simple Hacks to Give Your Retirement Funds a Boost
You can do plenty of things to help you make plans for your financial future. Here are a few key retirement hacks to remember to help ensure you enjoy the retirement you deserve.
Choose to Invest in Cryptocurrency
A cryptocurrency is a good option when considering alternative methods for saving for your retirement aside from a traditional 401(k). Crypto is an asset class that is not related to stocks or bonds. Most Americans choose to hold their retirement savings in stocks or bonds. By adding on an alternate route with cryptocurrency and diversifying your portfolio, it may help protect your retirement savings. There is still a lot of confusion surrounding crypto and the importance of researching this new area cannot be overlooked. It can also be volatile in many ways; however, there is also great potential for high returns.
Create an IRA
Opening an Individual Retirement Account or IRA is a good option, even if you already contribute to your company’s 401(k). A traditional IRA makes it possible to make pre-tax contributions. The investments you make to this account will grow and are tax-deferred. Once you retire, you will then pay income tax on your withdrawals. You can choose to have an IRA and a 401(k) to boost your retirement savings.
If you choose a Roth IRA, you will need to pay taxes before transferring any money to your account. After that, the growth and withdrawals are all tax-free.
Both a traditional IRA and a Roth IRA are good options for retirement. However, you will need to make the right choice for your financial future and go with the plan that works best for you now and after you retire. If you need help choosing which IRA would work best for you, the experts here at NASE can help you learn more about your choices and which would benefit you the most.
Simplified Employee Pension
Simplified Employee Pension Plans (SEPs) are a great way for you to be able to contribute not only to your employee’s retirement, but your own as well. Learn more about these plans in this NASE Minute Video! These plans do require you to contribute the same percentage for both your employee’s plan as well as your own plan but are easy to open and maintain. Additionally, depending on your circumstances, your contribution limit may be higher than other types of plans.
Choose to Make Automatic Contributions
It is important to remain consistent with your contributions if you want your retirement savings to grow. If you only occasionally contribute to your savings, you will not see your investment grow. Choosing to make automatic contributions will help ensure that your retirement savings remain on the right track. Automatic contributions are the most used method for a retirement savings account. In addition, you can choose to set up an automatic transfer method. Doing so will ensure that your nest egg will grow even when you are not thinking about it.
Keep Up with Good Habits to Eliminate the Bad Habits
When it comes to spending, you must change your bad habits into good habits as often as possible. For example, whenever you pay off a car loan, you should invest that money into something important, like your retirement, instead of using that extra cash to treat yourself. It can be easy to lose focus on the big picture whenever we pay off a major debt. Of course, it is nice to have some extra money that you did not have in your balance the months or years before. But adding some, if not all, of that extra cash into your retirement plan can help give your savings the boost it needs to keep your retirement years stress-free.
Pay Off All Loans
It is important to pay off all your loans and debts before retiring. That will help you avoid spending out your savings on high-interest payments. Using a balance transfer method to pay off credit card debt is a good start. Also, try to avoid complicated loans with high-interest rates, such as payday loans or car title loans that can often take several years to pay off.
At the same time, you should not allow yourself to become distracted by debt. Excessive debt can be one of the biggest obstacles you will have to overcome on your way to retirement. If you have some debt-related issues already, now is the ideal time to take care of them using a debt-reduction plan.
Some forms of debt are better than others and much easier to pay off over time. For example, mortgages and student loans are often incorporated into your financial plans. However, things like credit card debt and payday loans have high-interest rates that can wreak havoc on your budget and your retirement if you are not careful.
Put a Limit on Your Spending Habits
It makes sense, but it is something that can be difficult for many people to do. You may have followed through with your plans for retirement and put your goals into action. But if you do not reduce your spending, you will go through your funds very quickly. It is important to avoid living a lavish lifestyle before retirement so that you can live the life you have always dreamed of later.
Final Thoughts
Saving money can be difficult for the average household, if not nearly impossible. But by following these tips and other retirement savings hacks, you can increase your chances of having a worthwhile retirement that you can look forward to. Here are a few more quick retirement savings hacks to keep in mind:
- Always pay off your credit card balance in full each month.
- Develop your own personal spending plan.
- Wait 24-48 hours before you make a large purchase.
- Choose to make discretionary purchases with cash instead of a credit card by using the envelope method to save your money until you can afford it.
By following these helpful tips, you will be on your way to a stress-free retirement. In addition, choosing to constantly contribute to your fund and pay off all your credit card debt will help put more money into your savings to enjoy later. After so many years of hard work, you deserve to sit back, relax, and enjoy all the good things that come along with your retirement years. And having the financial freedom to purchase what you want or to travel across the country is a special treat that will make your retirement much more exciting and rewarding.
If you are interested in learning more about saving for your retirement, get in touch with the financial experts at the National Association for the Self-Employed for more information. We can provide you with more details of things you can do now to help your retirement savings grow. Get in touch with us today for more information about our benefits and find out more ways to help your business grow.