Building and maintaining retirement savings is one of the most important long-term financial goals for many Americans.
Regardless of your personal situation, having a plan for your golden years is a smart move—although getting started may seem overwhelming. Review these tips for taking the first steps to building your retirement savings.
Retirement savings plan
Determine your unique needs
- A common standard for post-retirement income is 70% of the annual salary you made while in the workforce. For example, if you earn $50,000 a year, you’d need about $35,000 each year in retirement to maintain your standard of living.
- The average retirement lasts about 20 years, so plan to fund at least two decades of post-work life
Review your options
- 401(k) retirement plans are commonly offered and provide tax benefits. Additionally, many employers provide a partial or total match.
- Roth and traditional individual retirement accounts (IRAs) are available from a variety of financial institutions and are relatively simple to set up. These accounts also offer some tax advantages.
- Health savings accounts (HSAs) have more specific and limited applications. However, they can help address the often significant cost of healthcare for retirees.
Set your goals and start saving
- While you might not be able to save a large amount from each paycheck immediately, getting into the habit of savings for retirement is crucial. You can increase your contributions over time as you’re able.
- Using an automatic payment, like a direct deposit into your retirement account each pay period, can help you consistently save.
After you work through this starting list for retirement savings, a financial professional can help you put all the pieces of the puzzle together for a long-term plan.
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