When planning for your retirement, you want to have as much money as possible saved up to live out your golden years. If you plan properly, there should be no worries about being able to afford your expenses and have extra spending money. It is difficult to estimate how much you truly need in retirement. Having a large retirement savings can reduce a massive amount of stress. For 5 must-know tips to retiring richer, keep reading!
Time is Your Best Friend
Time is the key to building retirement savings. While starting out in your career, it is difficult to allot money towards your retirement savings, although these are the most important contributions that you can make. If you are contributing in your 20s, you have several decades for your money to build on itself and grow. Make sure you keep your retirement savings in a high-yield savings account so your savings can compound over time.
Max Out Your IRA Contribution Limits
IRAs provide either tax-deferred or tax-free growth depending on whether you have a Roth IRA or a Traditional IRA. In 2021, the maximum annual contribution to an IRA is $6,000 for people under age 50 and $7,000 for people age 50 or older, due to the catch-up contribution. Utilizing a Roth IRA for your retirement savings can allow you to avoid paying taxes on the capital gains of your asset.
Use a Rollover IRA
As you change jobs over your career, you do not want to leave your retirement investments behind. By using a rollover IRA, your savings in your employers' IRA accounts "rolls over" into one account. This way, you can avoid paying taxes and withdrawal penalties. You will also be able to continue building your retirement savings tax-free or tax deferred.
Take Advantage of Your Employer Matching
If your employer offers 401(k) matching, you need to be taking full advantage of that benefit. 401(k) matching is where your employer matches a percentage of your salary based on how much you contribute to your own 401(k). If you are not enrolled in this benefit, you are saying no to free retirement money. If you can, aim to meet your employer's matching limit to maximize your retirement savings.
Buy Income-Producing Assets
Investing in income-producing assets, such as equity stakes in profitable businesses, can be extremely helpful in boosting your retirement savings. If you can get the right stock at the right price, you can receive a great amount of appreciation in your equity and dividends. Investing in stocks is not a short-term process. Allowing decades of growth is the key to having a substantial amount of retirement savings from your return on equity.
Retiring rich is everyone's dream. After a long career, everyone wants the opportunity to relax and not have to think about money. Talking to a financial advisor can help you increase your retirement savings with detailed advisor for your portfolio. Contact us today to set up a no-obligation consultation by calling 713-888-0841 or via email at email@example.com