Saving money is always a good idea, but when retirement comes into play, saving money goes beyond a good idea, it is simply essential. If you haven’t started saving yet, now is a good time.
In order to make the best decision for yourself (and your future, retired self) you need to take the time to research what kind of retirement savings account benefits you the most. If you're interested in learning more about the different plan options available you can read more here: Choosing a Retirement Plan.
How to Start
If your budget doesn’t allow much room for saving it is ok to start small, especially if you’re in your 20’s or 30’s. Start by contributing whatever you can and as your pay increases, increase your contribution. Any time you can spare some money, add it to your retirement. This is a great investment because you’re allowing your money to grow and work for you. If you plan on retiring one day, you’ll need some money to live on.
Take Advantage of Matches
In many cases if your retirement account is through your employer they will be willing to match the contribution up to a certain percentage. This is a great perk because it is essentially free money for your retirement. If this is something your company offers make sure to do your research and see how you can make the most of it. For example, some companies will match up to a certain percent, but if you leave the company before a predetermined length of time you can lose some of the money. These are things to be mindful of when looking into your company’s retirement matching program.
How to Handle Your Retirement Plan
If you just changed jobs and your retirement plan is through your past employer make sure to contact your plan administrator to get the account rolled over to your current employer. It is best to rollover your account as opposed to cashing it out when you change positions. Cashing out a retirement account can come with costly tax penalties, so if possible, rollover your existing account to your present employer.
As I mentioned earlier, as your pay increases so should your retirement contribution. The more you add, the better you’ll fair when the time comes to cash in on your investment.
So what are you waiting for? Lets get saving!