If you’re like many Americans, your retirement savings account is probably a bit on the slim side. The national average retirement savings accounts as of 2017 had just $44,000. Many people will need to take additional steps to prepare for retirement. Fortunately, there are many ways to boost your retirement income and save more money. One of the best ways to save more money is to invest wisely. But what exactly is investing wisely? Investing wisely means using your money to achieve a higher return on your investment. How can you do that? And what are the best ways to maximize your retirement investments? Keep reading to learn more.
Use Your Employers Match
One of the best ways to maximize your retirement investments is using your employer’s match. You might not have known this, but many employers offer an employer match program. If you invest in your employer’s retirement plan, they will also match a percentage of what you’ve invested. The average employer will offer a 50% match up to 6% of your salary. So, for every dollar you contribute, they’ll donate 50 cents!
Consider Annuities
One of the best ways to maximize your retirement investments is by considering annuities. Annuities are a type of investment that can be used with your other retirement accounts and investments. They provide a guaranteed income stream for the investor. One of the benefits of annuitizing your assets is that you will not have to pay taxes on any money you take out as long as you withdraw it at a certain age, typically between 59 and 70 years old.
Increase Contributions to Your 401K
One of the best ways to increase your retirement income is to invest in a 401K. A 401K is a type of employer-sponsored retirement account. You can contribute up to $18,000 per year, and if you are 50 or older, you can make an additional catch-up contribution of $6,000 per year. The money you put into your 401K grows tax-free until you withdraw it at retirement age. By contributing more to your 401K each year, you will boost your retirement savings significantly.
Set Up An IRA
One of the best ways to maximize your retirement investments is to set up a retirement account. If you’re not already doing so, you should set up an Individual Retirement Account (IRA). An IRA allows you to save money now that will grow tax-free over time. You can potentially earn more on your investment this way, as opposed to putting your money in a traditional savings account where it might earn less or nothing at all.
Automate Savings
One of the best ways to maximize your retirement investments is to automate your savings. Automating your savings means you set a percentage of your paycheck automatically deposited into a retirement account each month. This can help ensure that you save even if you don’t have the time or money to do so. Of course, it’s essential to make sure that the amount going into your retirement account doesn’t decrease your spending too much, but setting aside even 10% of your paycheck can make a massive difference over time. There are many options for automating your savings, including putting money straight from your paycheck into an IRA and setting up automatic monthly deposits with individual stocks or bonds.
*Collaborative Post