4 Secrets To Living Large Later in Life

You’re young, so thinking about life 40 years from now isn’t top of mind. But, planning for retirement now is hugely important and a few easy steps can result in literally millions of dollars in additional retirement savings.

  1. Start now: if you start saving $500 a month at age 25, you could have $1.75 million by retirement*. By waiting to start until 35, your retirement balance drops to $750,000. That’s a million dollar difference! And if you wait ‘til 45 you’ll have less than $300,000.
  2. Max Your 401(K): a 401(K) is a retirement plan offered through many employers. Simply put, it’s an account you put money in each month and is often invested by the bank running the plan. Many employers match a portion of what you save, so contribute the maximum they’ll match – it’s free money. The government let’s you contribute up to $17,000 per year.
  3. Set-up an IRA: an IRA or Individual Retirement Account is a plan anyone can set up themselves to save some additional cash for retirement. The maximum amount you can save is $5,000 per year but it gives anyone a place to save for retirement without needing to have an employer set-up account. If you can manage to contribute to both a 401(K) and an IRA, DO IT!
  4. Keep it invested and don’t touch it: commit yourself to investing and leave your money invested. Don’t check the balance everyday or try to anticipate the market ups or downs. These are long-term investments so you should be checking your statements every three months or so.

*assuming an 8% annual return in a tax-free retirement account

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  1. […] you decide to make that commitment, there are choices to make. There are a lot of different ways to effectively save for retirement, with one of the most common being the Individual Retirement Account (IRA).  When it comes to an […]

  2. […] probably heard “mutual funds” talked about as investments you can make in your 401(k) or IRA. A mutual fund simply pools the money of its investors (like you, when you pick a fund in […]

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