Are you feeling unsure and insecure as regards your retirement savings? If yes, then you're not alone.
Based on a research study carried out by the National Institute on Retirement Security, more than half of the respondents (56%) claimed to be concerned about their retirement savings.
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| Ways to Boost Your Retirement Savings in the New Year: eAskme |
If you've not been able to meet up with your retirement savings, then 2022 is an ideal time to buckle up. It's time to achieve your retirement plans.
We've come up with some tips to help you get back on track and hit that saving goal of yours.
No doubt, these tips will enable you to to to transform your retirement saving plans into reality.
1. Save Enough Money in Your 401(k) Before The End of 2024:
You don't have to wait till the new year before you start taking action in the right direction.
With the little time left in 2021, there's still a chance to boost your retirement savings and earn a decent tax return come 2022.
Your yearly taxable income gets lowered significantly by making enough contributions to your 401(k) before Dec. 31.
And by reducing your taxable income, you save money during the tax period or better still get an increase in your returns.
The highest amount you can accumulate in your 401(k) is $19,500. But if you are 50 years and above, you can save up to $26,000 before the year runs out.
2. Open an IRA in the Absence of a 401(k):
You have nothing to worry about if you don't have a 401(k). However, if that's your situation, the best way to do it is to open an IRA with a Robo-Advisor.
Robo-advisors are online corporations that use advanced software and computer algorithms to create and manage investment portfolios.
The best of Robo-advisors allows you to open a tax-advantaged IRA (individual retirement accounts) at the comfort of your home.
Corporations like Betterment and Wealthfront give their clients a choice to open either a Roth or a traditional IRA when creating an account.
The accounts allow for a maximum contribution of $6,000 and $7000 for individuals 50 years and above.
Both the traditional and Roth IRAs further come with delightful tax bonuses. However, when and how you earn a tax break is distinct.
3. Self-Employed Individuals and Gig Workers: Consider One of These Accounts:
If you're self-employed or a gig worker, having a discussion about retirement might make you giggle.
However, you should plan for your retirement or "old age" because you won't be as strong as you are now in the future.
To kick off your retirement savings plan, you don't have the choice of using a regular 401(k).
But, there are five other distinct retirement accounts you can use.
These accounts are ideal for contractors, self-employed individuals, and business owners.
They include;
- Solo 401(k)Simple IRA
- SEP IRA
- Traditional IRA
- Roth IRA
The solo 401(k) account is particularly designed for business owners with no workers or employees.
The account allows business owners to operate as both employees and employers and contribute to both responsibilities.
4. Use a good percentage of Your 2024 Tax Return to Buy I Bonds:
Inflation got the best of 2023, and we might continue to ride the wave at least in the early part of 2024.
Undoubtedly, many investors stay away from investing in bonds as inflation goes on the rise.
However, certain bonds such as the Series I bonds provide interest rates pegged to current inflation.
This implies that the interest rate increases as inflation rises.
As of November 2021, the interest rate of I bonds was set at an eye-popping rate of 7.22% until April of 2022. So you should take advantage and Buy some I bonds before the interest rate is reviewed next year in May.
By investing in I Bonds, you create a zero-risk place to accumulate your money while also earning a bigger return than a savings account or CDs.
To purchase I bonds, you can always buy online through the website of the U.S.
Treasury Direct. Better still, you can request that part of your tax refund be in the paper I bonds.
Conclusion:
Now is the time to start improving on your retirement savings.
Certainly, it might come off intimidating, especially if you're kicking off.
But the only strategy to defeating the uncertainties and fear is to get started and gradually keep moving.
This year, stop with the excuses and stay consistent with your retirement savings plan.
This will help you have enough to fall back to at old age
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