Retirement Saving Tips

Saving for retirement comes in many stages – identifying a plan, where to keep your money and how/when to contribute.  If you have already started your retirement fund then it is likely that you have started putting money into it; it is important to make sure that you are making the best choices in how to save the maximum amount possible for your retirement fund.

While saving for retirement, there are many things that can be done to ensure a successful saving strategy.

Avoid Fees

                While planning for retirement, it is likely and wise to work with a certified financial advisor.  They have an expertise in the daunting fields of investment and finance.  With this expertise comes a price and often extra fees as well. Once you find a financial advisor that you feel comfortable with, before signing anything you should make sure that there are not hidden fees waiting in the wings ready to attack at every transaction.

Also be sure to keep a consistent eye on our bank account.  As you are sure to have experienced in your lifetime, banks love fees.  Many times after the first year of your account at a bank, they will change your account  type or a new fee will appear.  Notification of this change usually appears amongst pages of fine print, offers and bank statements. Be sure to stay diligent in order to catch fees before they happen; while they might seem  petty, they quickly add up.

Eliminate Interest

If you have any outstanding debt, which is likely for most people, then you also have accruing interest.  Well, how do you get rid of interest? You guessed it; you pay off your debt.  Take a look at all of your outstanding debt and identify which debts have a higher interest rate.  After you have identified this, work hard and quickly to get those debts paid off – tackling first the debts with the highest interest rates and going down the line to the debts with the lowest. Always continue making payments on all debts but focus your efforts onto the most expensive debts.

If you have a home mortgage, keep an eye on that rate as well. After remaining in good standing by consistently paying your mortgage down, it is likely that your interest rate will drop. When and if this happens, it is a good time to consider refinancing to get a lower interest rate on your mortgage.

Save Now or Save Later – Roth IRA vs. 401(k)

                It is probable that your company offers either a 401(k) or a Roth IRA.  If your company does offer one of these plans, it is likely that there will be a ‘company match’ system put in place. Do not up pass the opportunity for free money – whatever they offer in regards to contributing to your retirement fund, choose that option. Regardless of whether or not your company does offer this, you are able to open one on your own account.  While both are great options for keeping and growing your retirement fund, there are some slight differences.

With a Roth IRA, taxes are paid on the front end;  when it is time to retire the money in the fund is all your  because taxes have already been paid.  That means, however, that less money is going in and interest is not  adding as much money as if the full amount was put into the account.  A 401(k), on the other end has interest  that goes on the full dollar amount put into your account. With this type of retirement account, the taxes are  subtracted after the account matures.  Both funds, however, are safe and will help earn you even more money  simply by contributing to your fund.

Author Bio

Robby Monk is an online marketer for BatesCarter.  BatesCarter is a full service accounting firm that provides accounting in Atlanta, North Georgia and the surrounding area.

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