Saving money is never easy. Saving money when you are in debt is more difficult. Remember, nothing is impossible. You can start saving for retirement today if you put a plan in place. Small amounts of savings can add up before you know it. It is never a good idea to put off saving money, especially for retirement purposes.
In May of 2018, Northwestern Mutual released a sobering study. Their survey showed more than 20 percent of all Americans have no retirement savings. A full third of those who are approaching retirement age have $25,000 or less saved towards retirement. This is a serious problem. You can become part of this statistic, or you can start saving for retirement today. Here are five simple options to help you get started today.
1. Employer-Based Plans
If your employer offers a 401(k) plan sign up today! Even if you are busy paying down debt, you can save money. A plan offered through an employer may also offer matching funds. If you are not taking advantage of this, you could be missing out on "free" money. Your employer may match part of what you deposit in the plan. There are also tax benefits associated with 401(k) plans.
2. Treat Retirement Savings Like a Bill
If you were buying a large item or saving for a vacation, you would find a way to fit it into your budget. Treat retirement savings the same way. Budget a small amount of money you can save every week. As you pay down a bill, put the amount you are saving aside for retirement.
3. Consider Automatic Savings
Contact your bank today and ask about direct deposit. Chances are, if you have money put directly into savings from your pay, you will find saving easier. Since there is a penalty for drawing money from a retirement plan, you are less likely to take the money out of the account.
4. Use Other Savings Options
If you use coupons, rebates, or other cost-savings measures, consider adding what you save to your retirement plan. Remember, while a couple of dollars may not seem like much, it can add up quickly. The more you save on other purchases, the bigger your retirement savings will be.
5. Consider "Gig" Work
If you have a free day or evening, consider putting your time to work making money. Gig work means no long-term commitment, but you can earn money in your spare time. Whether you deliver food, take on editing tasks, or can design logos in your spare time, you can find side work to earn extra money. These funds can be used to pay down debt and be used to fund your retirement account.
Today, more people than ever are waiting longer to collect Social Security. Typically, this is done to enable them to collect more when they most need additional funds. Having money in a retirement plan can help you better manage your finances when you can no longer work.
You should also educate yourself on the tax benefits of saving for retirement today. There are tax credits available, and for those who have access to a plan through work, you could have less money deducted in taxes from your paycheck by participating in the plan.
While the statistics on retirement savings are sobering, you have control over your financial future. Start making plans today to make sure you are saving for retirement, so your financial future is stable. Saving money for retirement does not mean you have to forgo a vacation or a big purchase, it simply means you need to have a plan in place that meets your needs.