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Thinking about retiring and living off your savings can be intimidating. While you might not want to think that far in the future, it’s important that you have a plan for what you’re going to do when the day comes that you want (or need) to retire. Even if you got started saving for retirement later in life, it’s not too late to make some big changes.
There are so many effective savings strategies to pick from and stick to it. The sooner you get your money accruing interest in your favor, the better. Here are some pivotal savings strategies you should employ starting today.
You can set up your direct deposit paycheck to automatically deduct a set dollar amount or a percentage to a retirement savings account. Retirement savings accounts are critical because they’re taxed differently than typical savings accounts.
If you set up your paycheck to deposit money in this account regularly, without you ever seeing it, you can find the account swelling to a respectable size without you needing to do anything.
This takes away the hard part of seeing your money and then parting with it before it can go to work for your retirement. If you’re constantly arguing with yourself over saving money, then automatic deposits can, essentially, take it out of your hands.
If your employer offers a retirement savings match, you need to maximize it. Any amount of money that is offered to you for what is essentially free is money you need to be claiming.
If your employer will match five percent of your paycheck with their own contribution, you need to be depositing five percent of your paycheck. This is an essentially non-negotiable piece of advice: it’s free money. Take it.
Just because you won’t see it until you retire doesn’t make this money any less free. Leaving even one cent on the table is an irresponsible decision. Maximize every percentage point of that employer match to make sure you’ve got a nice, fat retirement account when the time comes.
No, seriously, start saving now. Interest snowballs as it goes, and getting interest working for you (instead of against you, for once) is a great feeling. The sooner you have money in an account gaining the interest, the sooner the interest on that money can gain interest. You can see how this is a huge way to essentially get big bags of free money, right? Start saving today.
