Important Tips You Need to Know about Growing Your Retirement Savings
Retirement should be a time when you will be able to enjoy all the fruits of your labor. However, a new research shows that many people may have lost thousands of interest on their savings in the last six years. This could mean that people who have larger savings for their retirement could lose more.
So how do you grow your retirement savings?
Always be in the look out
Because there are no hard and fast rules on when rates could rise and dive, it’s important to shop around to find the best deal and avoid investing your hard-earned money in low interest accounts. You might find current accounts paying up to 5% interest nowadays, so might as well learn more about it.
Consider pension contributions
Increasing your pension contribution into an office or personal pension is also an excellent way to start grow your retirement savings. In some countries, like the United Kingdom, the government offer tax relief to those with higher contributions. Also, in most workplaces, employers will match the amount you put in or pay for your retirement funds.
Opt for a Roth 401K account
The contributions you make in a traditional 401(k) plan are tax deductible, but not with a Roth 401(k). When you retire, the withdrawals you make from your Roth account won’t also be taxed. If you’re still in your 20s or 30s, this can be a better choice, since your contributions will be taxed at a relatively low rate. If your company doesn’t offer Roth 401(k) account, you can open a traditional account instead. What’s important is that you start saving for your future now.
Take note of these tips, and as you go along the way, find more ways to add to your pension contributions or increase your retirement savings. That way, you can be sure to have a financially independent life when you retire.