Saving money for a secure retirement should be a primary goal for every working person, but many are not saving the amount that they will need for their retirement years. Because retirement is often seen as something that will occur in the far off future, many other priorities are often put ahead of saving for retirement and retirement savings are treated like an afterthought. Fortunately, no matter how old you are, there are ways to get your retirement savings back on track. Here are some methods you can use to save more money for your retirement years.
Participate In Your Employer’s 401(k) Plan
Most employers offer their employees the chance to participate in a 401(k) retirement plan that is administered and monitored by the company. Although many people opt out of this system, you shouldn’t. Participating in an employer’s 401(k) plan allows you to save for retirement automatically each pay period as a predetermined amount of money is deducted from your paycheck and deposited into the retirement account. The deposits that go into the account are tax deferred, meaning that you will only pay taxes on the money if it is withdrawn before you reach retirement age. Some employers also offer matching funds up to a certain percentage of the employee’s salary, helping the balance of the account grow even more quickly.
Increase Your Contributions
Many people choose to defer less than 5% of their income towards retirement savings because they want to have more money to pay for the things that they need now instead of saving the money for the future. While this is better than saving nothing, you could be doing much better. The federal government has issued maximum contribution limits for tax-deferred accounts to insure that wealthy individuals do not take advantage of the accounts to shield their money from taxes, but these limits also provide you with a good target to aim for when making your retirement fund contributions. Try to get as close to the maximum contribution amount that you can to ensure you will have enough money for a comfortable retirement.
Be An Active Participant
There are generally a number of different options available when making choices regarding your retirement accounts. If you do not actively participate in making these choices, you may find that you are missing out on money you could have earned. The default choices that will be made for your retirement account if you do not participate in the choosing are often the safest, but least lucrative, options available. Consider all of the options available and choose the ones with the right amount of risk and benefit for your current station in life.