Even though retirement may seem super far away, it’s easy to start saving for it now to prevent it from catching up with you. It’s important to start saving for retirement as soon as you can. Set up a retirement account if you don’t have one already, whether that’s through your job or just a personal account (there are many different types of retirement accounts).
Here are some tips and tricks to help make saving for retirement easy:
Contribute as much as (or more than) your employer match
Some employers will match a portion of what you contribute to your retirement account. If that’s the case for you, make sure you are contributing up to at least that contribution match percentage/amount.
Make it part of your budget
However you budget every month, make sure that saving for retirement is included in that budget. Some people like to set up automatic savings toward their retirement funds, making the retirement part of your budget straightforward and predictable. By setting up automatic savings, you won’t even have to remember to make a contribution!
Compounding, compounding, compounding
The good thing about most retirement accounts is that they have compounding interest. That means that the more money you put into the account, the more your money will grow. Traditional IRAs and 401(k) plans allow your money to grow tax-deferred, meaning you don’t pay tax on it until you withdraw it in retirement, when your income is expected to be lower. Other accounts, like Roth IRAs, allow you to pay the tax now instead later. Regardless of the tax treatment your account has, the more money you put into it, the more it will grow.
Have a realistic goal
When thinking about saving for retirement, think realistically about how much you can save per pay period (or in whatever time period you budget). While it is important to save, especially depending on how you want to retire, it’s not the only important thing to save for.
Expect the unexpected
While you can always set up automatic savings to go into your retirement accounts, there may be times when you need to change how much you save. Unexpected expenses may arise and finances may need to be adjusted. That’s why it’s also important to have an emergency fund so that you don’t have to tap into your retirement accounts when emergencies arise.
How DailyPay can help
PAY allows you to transfer any part of your earned pay before your payday to a bank account, pay card or debit card of your choice. This can help you meet bill deadlines and avoid late fees.
DailyPay’s SAVE feature lets you move any portion of your earned and unpaid pay into a savings account of your choice. This feature will help you build a savings safety net and develop good financial habits, with no cost to you.