How to – Save correctly for retirement
Start saving asap
One needs to save correctly for retirement. Not next week or when you get a raise or even only next year. Today. Because money you put in your retirement fund now will have more time to grow through the power of compound growth.
Do everything possible not to cash out your retirement account early
Dipping into your retirement funds early will hurt. Firstly, you’re negating all the hard work you’ve done so far saving and you’re preventing that money from being invested. Secondly, you’ll be penalized for an early withdrawal, and those penalties are usually pretty high. Finally, you’ll get hit with a tax bill for the money you withdraw. All these factors make cashing out early a very last resort.
When you get a raise, raise your retirement savings too
You know how you’ve always told yourself you would save more when you have more? Every time you get a bump in pay, the first thing you should do is up your automatic transfer to savings and increase your retirement contributions.
Until next time.
The MoneyShop Team
This article has been prepared for information purposes only and it does not constitute legal, financial, or medical advice. The publication, journalist, and companies or individuals providing commentary cannot be held liable in any way. Readers are advised to seek legal, financial, or medical advice where appropriate.