4 Best Tips for Retirement for People Who Haven’t Started Saving Yet, From the Experts

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Saving for retirement is so important. But what if you are nearing retirement and haven’t quite gotten started yet? Or what if you still have a long way to go but don’t know where to start? It’s such an important thing to do, but getting started is often the hardest part.

A new report from MedicareFAQ found that 59% of retirees have financial concerns about their retirement and 54% say they didn’t save enough money.

We asked various financial professionals, such as ChFCs, CFPs, CCFCs, and other wealth advisors, for the best tips on how to start saving for retirement.

Pay Yourself First

The first rule is to pay yourself first. We say this all the time, but what does it mean?

Matthew Benson, CFP at Sonmore Financial, says, “Pay yourself first. In other words, save for your retirement before any funds are deposited into your checking account. The simplest way to do this is by payroll deduction contributions into a company 401k. If your company does not have a 401k, you can often set up an alternate bank to deposit to that you only deposit funds into your IRA or other investment account.  If your goal is to save whatever is left at the end of the month into retirement, I have a pretty good idea of how much that will be, and so do you.”

Start a Roth IRA Now

The best time to start a retirement account was 20 years ago. The next best time was yesterday, and the next best time is right now.

Joe Petry, Ph.D., CFP Founder and Financial Planner, Mayfair Financial, advises that everyone should start a Roth IRA as soon as possible. He says, ” Even if you don’t put much into it to start, it grows tax-free. By starting early, you will have more flexibility around withdrawals later by starting the 5-year clock, which governs your ability to withdraw. “

Roth IRAs are actually really easy to start, so get online and do it right now.

Start as Soon as Possible

When should you do all of these? Now. This minute. You are reading this on your computer or phone, which means you can access the internet (unless someone printed this out and handed this to you, but we doubt that)- so that means you can get online and start a retirement account.

Mike Hunsberger, ChFC, CFP, CCFC, owns Next Mission Financial Planning. He says to start as soon as possible, even if it may seem too late or too early.

He says, “The biggest thing is to get started as soon as possible.  Time is your ally.  While compounding your investment is important, when you are just starting out, your savings rates and amounts will have a much greater impact than your earnings.  Start with what you can save and then every time you get a raise, invest 50% of the increase in your pay.  You haven’t learned to live on it so you won’t miss it.  This will supercharge your savings over the long term.  You’ll also be able to increase your lifestyle with the other 50% of the pay increase.  If your employer offers some type of match for your retirement contributions, this is usually the best option to start.”

Speak to a Financial Planner

Autumn Knutson, CFP® at Styled Wealth, says if you really don’t know where to start and are worried about running out of time, you should speak to a certified professional.

She says, “Let me explain why.  While it may seem straightforward to start saving toward retirement as quickly as possible, the next question is ‘to where?’ and ‘how much?’ There may be areas of your complete financial picture that need to be cleaned up that are of greater benefit to getting you to reach your goals than direct contributions to a qualified retirement account.  For example, perhaps there may be high-interest debt that charges interest at a higher rate than would be reasonable to expect from investing, or perhaps there are tax advantages to save at your income tax rate for expenses you already have for health, childcare, dental, charity, tuition, or for a business. There are sometimes incentives to save money into certain accounts that may be worth considering one option over another, such as employer matching contributions, or perhaps triple tax savings opportunities for a health savings account, or broader access to your funds before 59.5 in a Roth IRA or brokerage account for those who plan to retire in their 50s or younger. There are numerous considerations to have, and ultimately, having a plan that optimizes your specific financial goals, financial circumstances, and opportunities available to you will set you up with streamlined success for retirement and beyond without wondering if you missed something along the way.”

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