No matter what age you are right this second, you are at the right age to start saving for retirement. Every single second that you pass by that you are not contributing to your retirement funds, is a second that you could end up regretting once you retire. Starting a 401k is crucial to being well-off once you decide to hang up your hat on your working days. Throughout different stages of your life, there are different tips and tricks to contributing to your retirement funds and we are going to discuss those best practices.
Saving for Retirement at 20
This is probably the most important phase of your life to set yourself up for financial success. Although you just joined the workforce and retirement seems like a long way away, this is the key time to develop saving habits. Your company will most likely offer a 401k in which a portion of your paycheck will automatically be deposited into your 401k. If possible, you need to try to select the highest contribution amount allowed from your paycheck for your 401k.
If you are not offered a 401k through your company, you need to set up one on your own. Research different banks and see which ones offer a 401k that is the most attractive to you. Weigh your options carefully and make sure you choose the option that is best for your financial goals.
Starting a 401k when you are in your 20s is extremely important and should not be overlooked.
Saving for Retirement at 30
At any age, a contribution to your 401k is going to crucial to retirement. Experts state this frequently and it isn’t advice that you should ever ignore. When you are in your 30s, you are most likely more financially stable than you were in your 20s – you have probably (hopefully) paid off your student loans and have made a major purchase for a home. When you are in your 30s it is time to evaluate your other investments and your portfolio and see where you can improve. Enlist the help of a financial advisor and see where you should be aggressively investing and where you should be pulling back. A diversified portfolio is necessary to setting yourself up well for retirement.
Saving for Retirement at 40
When you are in your 40s, retirement is nearly right around the corner. Most people will retire within 20 years of their 40s and it is crucial in this stage to examine your investments and 401k to get a grasp of where you are financially. This is highly important because you don’t want to have any surprises in terms of what you have saved and what you think you have saved.
Examine your portfolio and examine what changes you can make so that when the time comes for retirement, you are financially set and won’t have to push it back simply because you need to work and earn more.
As you’ve seen, the best age to start saving for retirement is the age you are right this second. Contributing to a retirement account isn’t easy at any stage of your life – giving up money today is a challenge and a difficult sacrifice to make, but it’s a wise decision and the sooner you start putting something aside (even if it isn’t much) the better off you’ll be. Even a modest contribution to your retirement fund will help and you can take pride in your new-found sense of responsibility and take comfort in the fact that you have some savings to make things easier later in life.