What You Need To Know About Saving Money For Retirement
You can start saving money for retirement today in just three simple steps: save early and often, know your retirement plan options, and safeguard your retirement fund.
Saving money for retirement may seem daunting, but the proper knowledge can make it a breeze. In this article, we’ll teach you all you need to know to start saving today.
Here’s How to Save Money for Retirement
1. Save Early and Often
The sooner you start saving, the better. Many financial experts recommend starting to save 15% of your income at age 25, but starting earlier is even better.
Why is starting earlier better? The sooner you begin saving money for retirement, the sooner you can start taking advantage of compound interest.
For example, say you plan to retire at age 67. For your retirement plan, each year, you save $9,000 and earn 5% in compound interest.
If you start saving at age 25, you’ll amass $1,286,940.05 by the time you retire. Start just five years earlier, and that amount increases to $1,692,228.54. However, if you start ten years later at 35, you’ll only save up $720,573.94 for retirement.
The difference in numbers is striking! Start saving money for retirement sooner rather than later, and you’ll be able to save up more money with greater ease.
2. Know Your Retirement Plan Options
The number of retirement accounts available can be overwhelming, but we’ll break down your retirement plan options in this section.
Saving Money for Retirement with a 401(k) Plan
Many for-profit employers offer 401(k) plans to their employees. With this retirement plan, you tell your employer what percentage of your paycheck you’d like to save. Then, your employer gives that amount to an investment company to put into a mutual fund.
With a 401(k), you don’t pay taxes on your saved money until you withdraw it in retirement. So, if your employer offers to raise your savings rate automatically each year, it’s a good idea to say yes. Bear in mind there are limits on how much you can contribute each year, though.
Saving Money for Retirement with a 457 Plan
457 plans work similarly to 401(k)’s. The critical difference is that 457 plans are available from non-profit employers, while 401(k)’s come from for-profit businesses.
Saving Money for Retirement with a 403(b) Plan
Non-profit employers tend to opt for 403(b) plans over 401(k)’s. With a 403(b) plan, your retirement money is more likely to be invested in an annuity than a mutual fund. These annuities generally cost more than mutual funds in fees.
Saving Money for Retirement with an IRA
If you’re self-employed or your employer doesn’t offer a plan, you’ll want to get an IRA. With an IRA, you can get yearly tax deductions on your IRA contributions if your income qualifies. You’ll still have to pay taxes when you withdraw your money in retirement.
With a Roth IRA, you forego the tax deduction and instead pay taxes on your contributions before depositing them. If you follow your IRA’s rules, you’ll never pay taxes on that money again.
3. Safeguard Your Retirement Fund
Once you’ve put money away for retirement, you don’t want to dip into those funds, even in case of emergency. Ideally, you’ll budget so that you’ve got enough money to cover at least six months of expenses set aside in an emergency fund.
If an emergency saddles you with unexpected medical bills, home or auto repair, or critical travel you cannot afford, know you have options. One option that will allow you to avoid using your retirement savings is getting a title loan from Missouri Title Loans, Inc.
What Are Car Title Loans?
Car title loans use your vehicle’s lien-free title as collateral for loans up to $15,000. With a title loan, you can keep driving your car while paying off your loan. Unlike other forms of debt, car title loans don’t get reported to credit agencies. Therefore, they won’t affect your credit score.
How to Get Car Title Loans from Missouri Title Loans, Inc.
You can get a title loan from Missouri Title Loans, Inc. in as little as 30 minutes in our easy 5-step process:
- Choose a Missouri Title Loans, Inc. store on our location webpage.
- Fill out the application form to start the loan process.
- You’ll receive a phone call from a Missouri Title Loans, Inc. representative.
- Bring your vehicle, lien-free title, and ID to your chosen store location.
- Wait shortly while a representative appraises your vehicle.
After completing the title loan process, you can drive away with your vehicle and the cash you need to cover your emergency expenses.
Get Started Today!
Saving money for retirement doesn’t have to be a painful struggle. With our easy 3-step guide, you’ll be saving money for retirement in no time.
Protecting your retirement savings is a crucial part of our 3-step process for saving money for retirement. Start the process for getting car title loans from Missouri Title Loans, Inc. today to quickly and easily secure the funds you need.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.