For most hard-working Americans, retirement seems ages away. However, we stand by the saying that time is money! There are many retirement savings tips you can start using today as a 401k investor. From growing your account effectively to building money-savvy habits, this plan will give you the peace of mind for which your future self will thank you.
Jumpstart tax-deferred savings
By signing up for a 401K retirement plan, you save money in the long run. Yes, you are putting money into the account now, but it is tax-deferred. The sooner you begin your contributions, the more you will save. If you decide not to follow through with a 401K plan at all, you are permanently losing out on a lot. With a 401K retirement plan, your taxable income is reduced, asset allocations are protected and your investments (both for retirement and towards the stock market) will grow with time.
Avoid the urge to borrow
The plan your employer has established through your job becomes beneficial when you put in money into your 401K. Getting your contributions matched doubles your chances of saving even more for retirement faster. But with more money in your 401K than in your own personal savings account, it is best to avoid the urge to borrow from the plan. Penalties are included if you withdraw money before your set date, so it is recommended you avoid high taxes at all costs. Look at your 401K as a last resort if possible and consider other ways of getting a hold of emergency money, such as taking out a loan through other branches instead.
Communicate with HR about options
A 401K retirement plan has more to offer than you may think. Thankfully, human resource departments specialize in helping you find the right options to maximize your savings. Consider asking HR about setting up automatic payments at the end of payroll or checking what the maximum amount you can contribute will be. You also have the option to choose where you want your investments to pass on, such as stocks or bonds. These options will not only allow you to take control of financial retirement strategies but will also open up the opportunity to add value to every dollar, especially with the help of your employer’s match. Remember, you do not want to limit yourself to what you can offer and what you will ultimately save! The sky is truly the limit here.
Care Financial is a privately owned and operated business providing families, individuals and businesses with comprehensive wealth management strategies. Contact us online at www.carefinaicialonline.com or call us at 251-633-7122.