What Experts Recommend for Retirement Savings

Financial security during retirement doesn’t just happen, it actually takes planning and commitment. How you spend your money now will determine the quality of your living standards when you retire. This means that if you make smart financial decisions now, then you will live a decent life when you retire. On the other hand, if you don’t plan for your retirement, then you will struggle with your finances when you finally get to retire. In this article, we are going to focus on what experts recommend for retirement savings

1. Know your retirement needs

 

Before you start the journey of saving for retirement, the first most important step that experts recommend is for you to correctly identify
your retirement needs. This will help you know how much you need to save each year in order to achieve your target. Retirement is very expensive, in fact experts recommend that you will actually need more that 70% of your pre-retirement income in order
to sustain your living standards upon retirement.

 

2. Start saving

 

Once you have correctly identified your retirement needs you need to start saving. Start small and increase the amount that you save for
retirement as your income increases. The main reason why many people usually give up along the way is because they usually set unrealistic saving targets. Financial experts recommend that your monthly saving target should be realistic and achievable.

3. Take advantage of employer retirement saving plan

If you are employed and your employer offers a retirement saving plan, take advantage of the plan and save as much as you can. This way,
you will pay less tax because the employer will pay some of the expenses for you. In addition to that, retirement contribution will also be easy because money deduction will be made automatically.

 

4. Use a tax advantaged account

 

The federal government has put several incentives just to lure people to save for retirement. By using tax advantaged account such as 401(k) and IRA, you will be able to save your money without worrying about taxes. Experts recommend that people should take advantage of this option because it will enable them to save more and pay less tax.

 

5. Invest

 

The investment decision that you make now will impact hugely on the quality of living standards that you will have upon retirement. The best way to create your retirement financial security is by making smart investment decisions. Experts recommend that before you make any major investment decision, you should first consult an expert for advice and recommendation. This way you will lower the risk of losing your money.