Retirement planning is essential to achieving financial comfort later in life. Yet, contrary to popular belief, prioritizing the process should begin decades before you ever need to rely on the funds. Below, learn how entering the planning stages early in life offers higher rewards down the road. 

Is It Too Early to Start Planning for Retirement?

Ideally, a person starts contributing to retirement as soon as they earn their first paycheck. However, simply adding to the funds isn't effective enough for most individuals. Instead, you need to create a strategic plan to grow the money as much as possible by the time you reach retirement. Due to compounding, which is capital earned on re-invested money that accrues over time, beginning retirement planning between the ages of 25 and 35 offers the biggest potential on returns. 

What Are Some Retirement Planning Tips?

Take Advantage of Employer Contributions

One of the fastest ways to build a retirement fund is a 401(k). Such accounts allow you to directly invest a portion of your earnings, and all taxes are avoided until it's removed. Many companies offer investment matches for employees up to a certain percentage. To take advantage of the financial opportunity, contribute up to the maximum amount. 

Set Goals

In order to effectively save for the future, you should know where you need to end up. Determine how much money you’ll need to live comfortably after retirement, including aspects like your retirement location, needs, and wants. Once you have a number, you can work with an accountant to determine the best investment paths to take to reach it. 

Pay Off Adverse Debt

Debt-related interest payments can quickly drain away any investment earnings. For that reason, it's vital to prioritize paying off adverse debts as soon as possible. Such accounts include consumer debt, like credit cards and student loans, that don't offer any investment growth and have high interest rates. Mortgages, on the other hand, are viewed as an investment because properties build equity and can be used as collateral. 

Begin planning for your future with the help of the team at Scott Cornelius, CPA, P.C. in High Point, NC. From estate planning to tax preparation, the accountants provide one-on-one attention for a personalized experience. Learn more about the retirement planning process online, and get started creating a strategy today at (336) 885-5100.