It doesn’t matter if you’re 23 or 63; saving for retirement is critical, so you should develop a strategy.
Thankfully, setting money aside isn’t hard (and you can make it even easier). Put more money into your savings account with these four essential tips to help you save for retirement.
Don’t Neglect Employer Matching
Employer matching probably sounds too good to be true, so many people ignore it. This is a huge mistake! Employer matching plans mean that your company will contribute money to your retirement account per the amount you contribute. The percentage varies by plan, but any percentage of your contributions is free money!
Save During Self-Employment
Contrary to popular belief, you don’t need to be employed by a big company to receive retirement benefits. Solo 401(k)s and Simplified Employee Pension (SEP) plans allow you to contribute your self-employment income to your retirement. A SEP lets you put up to $61,000 (up to 25 percent of your self-employment income) into your plan!
Utilize a Health Savings Account
With health care costs rising, health savings accounts (HSAs) are more crucial than ever. The money you save in this account is usable for medical expenses, and any excess is for retirement. HSAs offer a dual benefit—they’re tax-deductible when you set aside the money, and the money is tax-free when you withdraw it for qualified health expenses.
On top of that, once you’re 65 years old, you can use the assets in your HSA for anything—it’s not limited to health care expenses anymore!
Know Your Contribution Limits
401(k) contribution limits are changing again in 2022! If you want to make the most out of your retirement plan, it’s important to remember the maximum contributions. While the catch-up amount remains the same at $6,500 for people over 50, the elective deferral is increasing from $19,500 to $20,500. Ensure you capitalize on this change and set yourself up for success.
Now that you know these four essential tips to help you save for retirement, enjoy worry-free years leading up to your payout!
