Retirement Savings Tips to Start Maximizing Your Nest Egg

Have you thought about how much money you will need to retire?  Do you have a plan on when you will retire or how you will reach your goals?

What is a Retirement Savings Plan?

Having a retirement savings plan is essential to securing your financial security later in life. By utilizing various retirement savings accounts, you can maximize your tax savings, invest in the index funds, and take advantage of compound interest —  leaving you with more money when the time comes to retire. 

A 401k is the most common retirement account that allows you to contribute pre-tax income to invest and grow tax-free through the company you work for. These accounts are often made available to select employees who elect to have a salary deferral to contribute to the retirement plan.

401k

The second most common retirement account is an IRA (Individual Retirement Account). These accounts are another great way to save for retirement as the money you deposit will grow tax-free. In addition, these accounts are not tied to an employer, allowing you to save for your retirement in any situation. 

IRA

The amount you should save for your retirement is different for every person. Because we all have different spending habits, the amount you’ll need varies. There are many different retirement calculators available, but one of my favorite methods of determining how much you should save is by multiplying the amount of money you currently make by 70%. 

How Much Should I Have Saved for Retirement?

Saving for retirement can be tricky and take a significant amount of time. The good news is that you have until the age of 65 to grow your nest egg. That is of course unless you are aiming to FIRE (financial independence, retire early), then you’ll need to elevate your investments and savings to reach your goals. Either way, here are some tips you can use to boost your retirement savings!

Tips to Maximize Your Retirement Savings

If your company offers any 401k benefits, this is a great way to save money for retirement.  Whenever making contributions into a 401k, the money that you contribute is pre-tax dollars and also grows tax-free. 

1. Take Advantage of 401k Offerings

Roth IRAs are another great way to save for retirement because of tax advantages. While it doesn’t allow you to contribute pre-tax money into the account, it DOES let your money grow tax-free. 

2. Utilize A Roth IRA

Swipe up now for more  financial tips!

Lined Circle

More Stories From

The Types of Retirement Accounts [Which Is Best For You?]

What Is Barista FIRE? Reach Early Retirement A Bit Sooner

What Is Lean FIRE?  The Frugal Way to Early Retirement