8 Strategies to Maximize Your Retirement Savings
Updated: Apr 25, 2020
When planning for retirement, it's always a good strategy to start saving earlier and investing. Here are the 8 Strategies to Maximize your Retirement Savings.
When planning for retirement, it’s always a good strategy to start saving earlier and investing, the better you’ll be.
“It’s never too late to get started” says Debra Greenberg, director, IRA product management, Bank of America Merrill Lynch.
We all look forward to retirement and that is our main goal in life.
The way you want to spend your retirement life depends on how much you have saved in your Retirement Savings Account.
Making the most of your retirement savings is essential if you want to build a wealth that will withstand the risk of time.
When I talk about withstanding the risk of time, I mean by withstanding the risk of inflation, and market volatility.
If you want your hard-earned money go further to secure your future, here are some 8 Strategies to Maximize Your Retirement Savings –
1. Start Saving Today
If you want to maximize your retirement savings start today!
Don’t wait for the right time to save or wait for a later date.
If you start off putting money away in your savings account, the more you’ll get of compounding returns.
You can start saving small and later you can start saving in a bigger volume.
The volume of your savings determines your compounding returns.
Every bit makes a difference.
So don’t wait and begin today with as much as you can, and start increasing your retirement savings to better your financial future.
2. Start Maximizing Your IRA Contributions
An Individual Retirement Account (IRA) is an individual retirement account that you open at a financial institution or bank.
You can either open a traditional IRA account or have a Roth IRA account.
For people who are self-employed in the United States have a few more options to choose from.
Both types of IRA allow your investments to grow and compound without income taxes as long as the money remains in the account.
The main difference is how your contributions are treated.
Resource Article: Compare Roth IRA vs. Traditional IRA
Depending on your level of income, an IRA might offer you a greater variety of low-cost investment options.
3. Start to Invest in Mutual Funds
I am a big believer in mutual funds for the average investor.
When it comes to the risk factor, stocks happen to be far riskier than mutual funds.
Mutual funds are a popular Retirement Investment Strategy and the best part is they offer diversification.
You can also start to invest in Individual Stocks.
The only difference here is individual stocks are far riskier than mutual funds.
The risk in mutual funds is spread across.
If you want to invest in individual stocks, one has to have extensive research before investing, especially if you are a novice investor.
4. Start to Contribute to Your 401(k)
Now, what do I mean by 401(k)?
For many of you who don’t know what’s a 401(k), it’s an employer-sponsored retirement plan that’s funded directly from your earnings.
It’s an investment account expected to accumulate interest, with tax incentives attached to it on condition that you do not withdraw from until you reach retirement age.
There are two types of 401(k): the traditional 401(k) and the Roth 401(k).
However, there are a few exceptions where you can withdraw from a 401(k) before retirement, but they aren’t particularly likely.
The name 401(k) refers to the statute in the U.S. tax code that describes the tax deferment and penalties for withdrawal on such accounts.
Resource Article: The Complete Beginner’s Guide to 401(k) Plans
5. Invest in the Crypto Market
Cryptocurrency markets are intrinsically very volatile.
Investments in cryptocurrency should always be considered as a high-risk, regardless of your confidence in your coin or token selection.
You should only invest money that you can afford to lose if the market turns against you.
Cryptocurrencies are a much riskier investment as compared to traditional assets such as bonds and shares, given the sheer volatility of the market.
A cryptocurrency can easily fluctuate in value more than 10% in a single day, which is unheard of in the traditional financial markets.
That said, 2019 promises to be the perfect time to enter the market.
The fundamentals have been showing signs of growth for some time and, more recently, the technical indicators are starting to become positive.
What kind of Crypto Coins are we talking about?
Well, the following are the best options you may wish to invest in –
6. Start to Invest in Precious Metals
Investing in precious metals is a good way to protect your wealth.
The most common precious metals that provide you sustainability in your investment portfolio are gold and silver.
The main reason why people are not investing is due to a lack of knowledge.
You can start by investing in precious metals, such as gold and silver.
It’s always a good idea to diversify your investment portfolio by starting to integrate lesser-known metals like platinum, palladium, or copper.
If you would like to stick with low-risk precious metal investment, then silver is the way to go.
Silver has many industrial uses and will be in high demand in any economic climate, whereas gold is mainly used in jewelry and investing.
And, market watchers predict the price of silver could make a one-year gain of over 21% in 2019.
7. Keep that Extra Fund Aside
If you are an employee of a company, whenever you receive a raise or a bonus, don’t just spend it away!
It might be a good option to save that extra money in your retirement plan.
Investment Tip: Don’t treat your bonus or extra money as a play money.
8. Setting a Goal for Your Retirement
If you wish to retire early in life then it’s always a good idea to set your retirement goal.
You need to do your math correctly.
Knowing how much volume of savings you want to make in your savings process shall determine how much money you will enjoy in your retirement life.
Not to mention your compounding returns which you shall be receiving.
Start planning when you want to withdraw your wealth.
You will need to figure out which accounts to roll over, which to start talking first.
“For every year you can delay receiving a Social Security Payment before you reach the age of 70, you can receive the amount you receive in the future” – Greenburg Says.
To Wrap Up...
Start maximizing your retirement savings today.
The earlier you start is better for you and the goal here is to be consistent with your retirement savings plan.
I am not saying you need to follow all the above steps which I have mentioned.
Even if you start to follow one or two of the above then rest assured you shall accumulate a lot of wealth before you plan to retire and enjoy your financial freedom retirement lifestyle.
I hope you enjoyed reading my blog post.
Let me know your thoughts or suggestions in the comments below.
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