How to start Saving for Retirement

Start small and make incremental increases

Setting aside a huge chunk of your paycheck isn’t easy. Start by saving $25 or $50 per week, or whatever amount you can handle. Gradually work toward socking away 10 percent to 15 percent of your income each year. Once you’ve developed that habit, you can work toward increasing that amount if you need to.

Contribute enough to get a 401(k) match

If your employer offers a matching contribution for retirement savings, try to save enough to get the full match. For instance, if your employer will match your contributions up to 5 percent of your salary, but you only contribute 3 percent of your salary, you’re leaving free money on the table.

Open an IRA or HSA

In addition to consistently contributing money to your retirement account at work, look for other ways to fund your retirement. For instance, you might open one or more IRAs to save on your own, outside of your 401(k) at work. If you have a health insurance plan that includes an option for a health savings account (HSA), your HSA contributions provide you with a tax benefit now—and if you leave them alone until you reach age 65, you can use the funds for any purpose (not just healthcare) with no tax liability. You might also consider investing in a rental property and adding all the rental income to your retirement portfolio.

Building your retirement savings is both an art and a science: Do the calculations to arrive at the right number to set your personal goal, and then draw on your creativity to assemble an array of saving vehicles to help you meet that goal.

(This article written by: Cathie Ericson)

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