Jarbuck’s guide to how to save for retirement. We will walk you through what to look for in retirement accounts along with investment advice.
Start Saving Early
The earlier you start saving for retirement, the better. When we’re young, we have less financial responsibilities, which can allow you to put aside a small percentage of your earning toward retirement. As time goes on, life gets more complicated. Marriage, children, and even changes to your career can impact your savings priorities. Start saving today, even if it’s just a little!
How to Invest
The lineup of retirement accounts looks confusing at first: 401(k)’s, 403(b)’s, 457s, I.R.A.s, Roth I.R.A.s, Solo 401(k)’s and so on. All of these accounts depend on you and where you work. Advisors will tell you that it’s generally best to keep all of your savings in one place. Simply put, it’s easier to keep track of it that way. If you have a 401k with your employer, roll all your retirement accounts into an I.R.A. once you leave your employer to simplify things, especially as you near retirement.
Fees
Unfortunately, nothing in life is free, even in retirement. Accounts that house your retirement funds are typically not free, and the fees you pay can eat into your returns. If you are employed, the company that runs your plan (and whose name appears on the account statements) is charging your employer fees for the service.
Check-in On Your Investments
Once you have an account set up for your retirement, you should check-in on how your money is doing and where it’s being invested. If you’re set up to have your retirement saving taken automatically from your paycheck, consider increasing that amount by 1% yearly. We promise you won’t notice it, and those funds will add up nicely.
Get Money When You Need It
Once you’re ready to retire you may ask yourself, “How much can I take out of my account each year?” So much of this depends on the nature of your investments, your age, your health, and your spending. Talking to a financial professional about your approach is the best way to tackle these questions. Make sure to speak to someone who agrees to act in your best interest.
Sources:
New York Times. “How to Win at Retirement Savings” 2020. https://www.nytimes.com/guides/business/saving-money-for-retirement
