Saving for retirement is crucial to your financial stability. When you plan for your retirement, it is important to start as early as you can so that compound interest can build your savings. Whether you’ve started saving for your retirement or haven’t, check out this blog for some tips to maximize your retirement fund.  

Start Saving Today  

Get your retirement savings in check by starting. If you are just starting your retirement savings, you are on the right track. Retirement savings is easy if you are patient and understand that your saved assets are making you money. Compound interest works in your favor to build your retirement account. Be sure to work through your budget to nail down how much you can financially set aside each paycheck or each month to put towards your retirement. Put in as much as you can. 

 

Invest Your Income 

 

401(k) Accounts 

If your employer offers a 401(k) account for you, take advantage. Contributing to your traditional 401(k) is a huge advantage as it allows you to invest pre-taxed money straight out of your paycheck. A Roth 401(k) is a similar account that uses your income after taxes rather than pre-taxed income. With 401(k) accounts it is important to understand how much you can afford to invest. If your employer offers both a Traditional and Roth 401(k) be sure to consider what tax bracket you are in when you retire to see which is the best solution for you.  

 

IRA Accounts 

Individual Retirement Accounts are another wonderful option to nest your savings. Like a 401(k) there are Traditional IRA accounts and Roth IRA accounts. Your contributions to a traditional may be tax-deductible, meaning your earnings grow tax-deferred until you are using the funds when you retire. A Roth IRA account contributes your earnings after-tax, so when you use these funds when you retire, those funds will be available to you tax-free.  

 

Yearly contributions to IRA and 401(k) are limited, so that is why it is so important to start as soon as you can and put as much as you can towards your retirement account. As always, please consult your CPA for any retirement advice 

 

How Much Should You Contribute?  

If your employer offers to match your contribution, you should at least be contributing the amount to take full advantage of what they match. As you age and grow in your role, be sure to budget more and more to contribute. It is important to contribute the most you can, so it has the opportunity to grow.  

 

As you get tax refunds, bonuses, or save up some extra funds be sure to stash those away for retirement savings. As hard as it is to not splurge with those funds, your future self will be thanking you later for stashing away those funds for retirement.  

 

How Can You Catch Up? 

With IRA and 401(k) accounts, once you hit the age of 50 you are eligible to go over normal limits to save additional amounts or catch up to where you’d like to be. So, if you started later than you would have liked to, just remember that there is a great option, later on, to boost your savings with catch-up contributions.  

 

It is very important to automate your retirement contributions each paycheck or each month to be consistent. As you have more to put forth, be sure to adjust your budget to allocate more to your retirement account. Set goals monthly, yearly, and even milestones to challenge yourself to reach or even surpass.  

 

Recognizing you need to save as much as you can is the first important step in saving for retirement. Regardless of your age, be sure to make a plan and save, save, save! Don’t regret starting too late, there are many options available to you to save for retirement as well as creative ways to catch up. Sun Canyon Bank has your back through your savings journey, let’s get started.