Saving enough for your retirement goals is possible.

Many Americans are unaware of how much they’ll need to retire. But, not knowing how much to save may result in being unprepared for the future. That’s why making a strong retirement plan is essential to financing your goals.

Planning takes time, commitment and money. However, with the right tools in place you can easily put aside enough so your retirement is exactly as you want it to be.

Employer Savings Plans

A number of Americans have a retirement savings plan offered by their employer. Despite this offering, there are a number of workers that choose to opt-out of the program as a means to save money in the short-term. However, not contributing to plans that are offered through your workplace can be detrimental to your retirement.

Many employers offer plans such as a 401(k) which we advise all workers to participate in. Further, it’s recommended to review your current financial expenses to contribute as much as you can to the program (without feeling deprived).

Workers should participate in plans offered by their employers for a number of reasons. Firstly, your taxes will be lower as you will receive a benefit for contributing funds to it. Many companies also contribute a percentage of funds for signing up with them which can add up in the long run especially with compound interest and tax deferrals.

Further, the money will be automatically deducted from each of your paychecks, making it easy and stress-free to contribute to your future.

Be sure to ask questions to understand exactly how the plan works and how long you’d need to stay with the company to be eligible for the contribution.

Employer’s Pension Plans

Employers also tend to offer more traditional pension plans. As such, you should confirm what is offered by your current employer. If your employer does offer a pension plan be sure to understand exactly how it is set up and will impact you.

To determine how the pension works, you can request a benefits statement from the employer. On the statement will be a personalized adjusted figure that shows exactly what your benefit is worth.

It is also good to note that employers need to educate themselves about what would happen to the plan should they leave the position. Oftentimes, employees are unaware of the consequences and leave confused by the outcome.

Finally, if you are married, it is advised to look into any pension plans offered by your spouse’s plan. Some plans allow the spouse to participate which means you may already be entitled to benefits that you were unaware of.

Diverse Investments

If you are not contributing to an employer’s plan, knowing how to invest your money can seem daunting. How you save your money is important and can seriously impact how much you’ll have in the future. We recommend speaking with a financial advisor who can help guide your investments in the right way.

It is always best to diversify by placing your savings into different types of accounts. This will reduce the risk of losing money and increase your return. Regardless of how you choose to save its vital to understand your options to how they will impact your current financial situation and long-term plans.

Individual Retirement Accounts

Contributing to an Individual Retirement Account (IRA) allows you to put up to $5,500 a year into savings. Plus, if you are 50 or older you are allowed to contribute more.

Even if you aren’t able to contribute the full $5,500 keep in mind you can always start with much less and slowly increase the amount over time. Contributing this type of plan also offers a tax deduction that can save you fees on your filings for the year.

It’s important to note that there are two types of IRA accounts (traditional IRA or a Roth IRA). Regardless of the type you select, both plans can be arranged to automatically deduct the contribution from your bank account.

However, it is best to speak with an advisor before selecting an account as the contribution, withdrawal, and after-tax value will be determined by the type of plan that’s selected.

Ultimately, saving for retirement doesn’t need to be stressful! There are a number of options that can accommodate your goals, circumstances, and preferences to get to retirement. If you’d like to speak with a professional about your plan, get in touch with us today.

Image: Unsplash