The vast majority of people fail to save enough to fully retire, forcing them to continue working far past retirement age. Working with retirement plan advisors can help you avoid this eventuality. You should also start saving immediately even though you may think you have plenty of time. Additionally, there are other steps you can take to make sure you can afford to retire when you reach eligibility.
Open a Second Savings Account
In addition to your IRA, you should have a savings account that you contribute to on a regular basis. There are plenty of options for high-interest savings accounts online to give you a boost in building your savings. This account should be used for financial emergencies and other major expenses to avoid borrowing or withdrawing from your retirement account.
Participate in Your Employer’s Plan
If your employer sponsors a 401k plan, you should join it as soon as you’re eligible. Be sure you’re contributing up to the maximum limit for matching donations. This will help you double your savings, and that money will be yours once it’s vested. When you retire or leave your job, you can roll that money over into your IRA without suffering a penalty.
Reduce Your Debts
You should start working on a plan to reduce your existing debt and expenses. This will give you more disposable cash to put towards your retirement savings each month. While the IRS limits how much you can contribute to an IRA, you should talk to your retirement plan advisors to make sure you are contributing the maximum each year. Once you reach age 50, you’ll also be eligible for catch-up contributions to ensure you can retire on time.