Prepare for Retirement

Please note: the following post is a guest post.

No matter what stage of life you are currently in you can also be preparing for your retirement. The time will come when your work will be done and you will be able to have more freedom to pursue the passions that you enjoy. However, the amount of money that you save for retirement will dictate how much money you have to put towards living expenses, hobbies and travel.

Just the thought of needing that much money might send you right out to look for loans but you don’t need a loan just yet. Consider all the ways that you can save and plan ahead during different stages of your life. When you first join the work force you may not be hinking about retirement. Growing old seems so far away and you live for the moment, especially in your youth. However, this is the best time to start saving for your retirement.

No matter where you work or how many hours you work, check to see if your job offers any type of 401K or 403b program. You can start by just putting in a percent or two each paycheck. You will barely notice that the money isn’t there and in the end, it will work in your favor during tax time.

As you establish a career, your employer is more likely to offer matching incentives for your retirement savings.  If you have a 401K or 403b and you are putting money away, good for you! Once you find a career and settle into a company, look to see if your employer will match any of your contributions up to a certain percentage. If they do, make sure that you are putting in at least that percentage, if not more.  If your employer matches up to 2% and you are putting in 2%, it means that 4% is actually being tucked away for you to use when retirement rolls around.  Don’t be discouraged if the amounts look small. At this point in your life, even a small amount of money, when interest is accrued, will turn into something considerable in the future.

The younger you are the more risks you can take when it comes to investing the money in your 401K or 403b. Speak with a representative to learn about the specifics that you are investing in. This is also a great time to open up an IRA or Roth IRA. Here, you can also tuck away money meant for retirement. The options include taking a tax break now and paying when the money is removed or paying taxes on it now. Either way, the money is set aside specifically for retirement.

Throughout your life, continue to work towards the goal of being debt free. You want to pay everything off so that you don’t need to continue to make those payments while you are on a retirement budget. Some people even set the goal of paying off their mortgage, as that is one of the biggest expenses a retired person can have.

Don’t forget to keep a savings account. While you are only earning the minimum amount of interest, it is still a good idea to have some money tucked away in a savings account with no requirement about when you can take it out and how old you have to be to gain access to it.

Remember that for many people looking to retire in years to come, there is no guarantee about Social Security. If you don’t count on that check every month, you will be more aggressive in your savings and be pleasantly surprised if it all works out.