How to Save for Retirement
Great tips! Here are a few additional ideas to consider when saving for retirement:
- Open an IRA: An Individual Retirement Account (IRA) is a great way to save for retirement outside of your employer-sponsored plan. Depending on your income level, you may be able to contribute up to $6,000 (in 2023) annually to a traditional or Roth IRA. Consider working with a financial advisor to determine which type of IRA is best for you.
- Consider a Health Savings Account (HSA): If you have a high-deductible health plan, you may be eligible to contribute to an HSA. Contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free. Plus, any unused funds roll over from year to year, so it can be a great way to save for healthcare expenses in retirement.
- Delay Social Security: You can start receiving Social Security benefits as early as age 62, but your monthly benefit will be reduced if you do so. If you can afford to wait, delaying Social Security until your full retirement age (between 66 and 67, depending on when you were born) or even later can result in a higher monthly benefit.
- Consider downsizing: As you approach retirement, you may want to consider downsizing your home or relocating to an area with a lower cost of living. This can free up extra funds that you can put towards your retirement savings.
- Don’t forget about inflation: Inflation can erode the value of your retirement savings over time. When calculating how much you need to save, be sure to account for inflation and adjust your savings goals accordingly.
Remember, saving for retirement is a long-term process, and it’s never too early (or too late!) to start. By taking the time to establish a savings goal, create a budget, and seek professional help, you can set yourself up for a comfortable retirement.