Saving for retirement can be a challenge, especially when also dealing with auto loans, mortgage payments, childcare, and credit card debt. However, taking steps to fund your nest egg as much as possible will reduce stress and financial burden once it’s time to retire. CPAs generally advise to start putting money away early, but it’s never too late to begin. Here are a few tips to make sure you’re able to comfortably enjoy your golden years without worrying about finances.
How to Boost Retirement Savings
1. Take Advantage of Employer Contributions
If your employer offers a 401(k) plan where they match your contributions, take full advantage of it. Allocate a certain percentage of each paycheck to the retirement account, which will come out before taxes. Whatever your employer agrees to put in on top of that is essentially free money. To maximize this benefit, it’s wise to at least contribute the same percentage that your employer matches.
2. Put Any Extra Money Towards Retirement
Any time you receive extra money, such as a tax refund, work bonus, lottery winnings, or an inheritance, set it aside for retirement. As tempting as it may be to spend it, keep in mind you will get the most value out of putting it towards the future. Also, every time you get a raise, the 401(k) contribution percentage should increase.
3. Consider a Health Savings Account
Healthcare costs are often the biggest expense retirees face. Opening up a Health Savings Account can help ease these costs. It allows you to make tax-free deposits into a savings account specifically designated for medical-related expenses. All the funds you put in will collect interest and continue to grow over time. Additionally, the contributions will be tax deductible, providing further savings down the line.
4. Hire a CPA
Whether you’re just starting to think about retirement or you’re nearing the end of your career, working with a CPA can prove invaluable. They will help you find the right tools to manage money and maximize retirement savings. They can evaluate all of your funding resources to figure out which investment combination is most likely to provide a sufficient amount of income to last you through retirement.
Looking for a reputable CPA to help you devise an effective retirement savings plan? Contact Erie & Associates, P.C. They will take the time to assess your current situation and determine asset allocation strategies. Offering 30 years of industry experience, they have assisted numerous Texarkana, TX, residents in achieving their retirement goals. Call (903) 792-6651 to arrange an appointment, or visit their website to learn more about the services they provide.