Tips For Saving For a Happy Retirement

Building your retirement account is one of the most financially responsible steps that you can take for your future.

According to recent studies, 20% of Americans who are over the age of 50 have no retirement savings, and 61% of employed Americans worry that they won’t have enough money for retirement.

If you start researching the need for a retirement account and how much money you need, you’ll probably find yourself overwhelmed by the amount of information available to you.

Fortunately, we’ve put all the information that you need together to help you get started on building a happy retirement account today.

How Much Money Do I Need for Retirement?

This is one of the most common questions that people ask when it comes to retirement. There are too many factors that determine how much money you need to give a uniform answer, though. There is an approach that many experts recommend.

By the time you’re 30, try to have your annual income multiplied by one in a retirement account. By the time you reach 40, have that number at three times your annual income.

Strive for six times your annual income in a retirement account by 50, eight times your annual income by 60, and 10 times your annual income by 67, which is the average retirement age in the United States.

Am I Too Old to Start Saving for Retirement?

There is no age limit on saving for retirement. Many people neglect their retirement account in their 20s and even into their 30s, which is why so many people are so worried about their financial future.

However, you’re never too old to start putting money into a retirement account. You may need to be a bit more aggressive with your savings as you get older.

Working with a financial planner is a great move, as they’ll be able to give you more detailed insight into how to build a retirement account, even if you’re getting started a bit later.

Now that we’ve answered a couple of the questions that people usually ask about retirement, let’s get into some tips for building your retirement account.

Use the Resources Available to You

Many employers offer a 401(k) plan to their employees. If you’re unfamiliar with the concept, a 401(k) is a retirement plan in which you contribute a percentage of your pre-tax income to the plan and your employer matches that percentage up to a certain amount.

For instance, you may be able to put 5% of your pre-tax income into the retirement account and your employer will also put 5% of your pre-taxed income into it.

This is a great way to build up your retirement savings with money that you never actually see. This makes it easier for people who feel like they don’t have enough money to save for retirement since it can actually lower the amount that gets taxed.

If your company doesn’t offer a 401(k), you can still open your own retirement account. You’ll need to choose between a Roth IRA and a traditional account, both of which have their own pros and cons.

This is another reason to work with a financial planner, as they can determine your goals and will consider your personal financial strategy when helping you choose the right kind of account.

Supplement Your Income

Depending on your age and your current job status, this tip may be easier to implement. However, if you’re younger and wondering how to save for retirement, picking up a second job or a side hustle may be a great option.

Fortunately, we live in a society in which picking up a side gig is easier than it’s ever been.

While you may not be able to completely fund your retirement through working for Uber, Lyft, or DoorDash, these options now make it easier than ever to put some extra money in your pocket every week.

Take any money that you earn from your supplemental income and put it into your retirement fund.

Obviously, you’ll need to be sure that you pay any applicable taxes on that money, and depending on the structure of your job (independent contractor or employee), you may need to fill out some extra forms. The goal is to build a retirement account legally.

Look for Areas Where You Can Save

Most of us waste money every day. Even if you read that statement and don’t think it applies to you, there’s a pretty good chance that you’re stopping for coffee every morning, going out to eat more than you should, or buying things on impulse.

While saving for retirement doesn’t mean that you never enjoy the fruits of your labor, you may need to cut back on some frivolous spending, especially if you’re getting a late start on your retirement savings.

Sit down and make a budget so you can get a better understanding of where you’re currently spending your money.

When you see all the information about where your money is going in black and white, you can get a better grasp on where you can make some changes.

Choose the Right Retirement Location

The government is eventually going to tax you on the money that you put into your retirement account.

If you use a 401(k) to put pre-taxed income into an account, some states tax you on that money once you’ve retired and that money becomes your income.

With this in mind, it’s a good idea to look for states that don’t have any state income tax. Do some research about the pros and cons, though, as you’ll want to consider the cost of living of the state that you’re thinking of retiring to.

Stick to the Plan

Finally, it’s important that you stick to the plan that you’re committing to. Ideally, you already have some money set aside for retirement, but even if you don’t, today can be the day that sets you up for success in the future.

Whatever strategy you choose should be chosen based on ample research. Once you’ve chosen your path to retirement savings, be prepared to stick to it. You won’t be able to save the full amount that you need for retirement in a week, a month, or even a year.

However, making good decisions today can put you on the path toward personal financial success and a comfortable retirement.

Sticking to the plan also means that you don’t touch your retirement funds unless you have no other option.

The money that you designate for your retirement isn’t there to fund a last-minute vacation or the purchase of a new vehicle. Instead, it’s the money that you’re going to live on after you’re done working.

Save Today For a Happy Retirement

Building your retirement account is one of the smartest moves that you can make for your future.

Regardless of how many years of your life you’ve spent working, you’re probably looking forward to the day when you can wake up when you want, enjoy your hobbies, and not have to worry about living up to your employer’s expectations.

Unless you’re independently wealthy, the only way to do that is to set yourself up for retirement. By implementing these tips, you can put yourself in the right position to live well after your working days are over.