Posted By Ziga Breznik, Last updated: Feb 22, 2020
Oh no! Have you left your pension on the long finger? Don’t worry – you’re not the first, and you certainly won’t be the last. There are lots of ways you can get started when it comes to saving for your retirement, even if you’ve left it too long – the important point to remember is that you’ve realized the problem and starting to fix it today.
If you’re lucky enough to be employed by a company that offers a 401(k), you should start contributing immediately. 401(k) plans want you to save successfully, and they’re structured in a way that even if you start contributing now when you weren’t before, the impact you’ll see on your take-home pay won’t be too jarring. Furthermore, you can rollover to a gold IRA to further diversify your retirement portfolio, check out our rollover 401k into gold ira guide. Also remember that if you change employer, there are options for your 401(k) which will allow you to maintain the benefits.
If you’re really lucky, and your employer offers to match your 401(k) contributions, you should thank your lucky stars – and make sure that you’re contributing enough to fully take advantage of the match. To illustrate the point, look at this example: your employer offers to match 30% of your contributions up to 6% of your salary. If you earn $70,000 a year and contribute $4,500 to your retirement plan, that means you’d get $1,350 from your employer. That’s essentially free, and you’d be crazy not to take advantage.
Packing away your cash into your retirement fund can be a little depressing if you think about it too hard, so solve the problem by not thinking about it – at all. Hold up!
We mean not thinking about it because you’ve automated it, and not because you’ve put your head back in the sand – ok?! Put your monthly contributions on auto-pilot and it will be one less thing you have to worry about. Many banks and financial institutions offer this service, so talk to yours and see what you can figure out. If you are new to investing, you can check out our beginners guide.
If you were working on any other project, there’s a good chance you’d think about setting yourself some goals or benchmarks. There’s no reason not to do the same with your retirement saving – it will orient and focus you, and making hitting benchmarks along the way much more satisfying. Use an online tool to find out what you should be able to save and when you might hit the milestones – then celebrate when you do!
It’s not a decision to be taken lightly, but you should know that you have the option to push back the date you start receiving your social security payments – for each year you postpone, the monthly payment you will receive will increase. You can start the process at age 62, and delay the payments until age 70. If you were to delay your monthly benefit for even a year, you’d see a significant impact on your future income, so if you’re serious about boosting your pension, you should check it out. With the laws of compound interest being what they are, we understand why – if you haven’t yet started to save for retirement – you might be a little disheartened. Instead of wringing your hands in despair, however, you need to get moving NOW! The most important thing to remember is that you’ve realized the importance of making a change, and you’re willing to start fixing it to. With an attitude like that, you can’t go wrong – so start sorting out your pension today!
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