When it comes to retirement planning, it’s never too early to start saving. By investing early you may be able to take advantage of compound interest. Your retirement account has the potential to grow faster because the money you would have paid in taxes each year remains in the account and add to the compounding effect.
Putting aside a portion of your salary can be a challenge. Many people want to contribute the maximum permitted by their plans but find it takes too big of a bite out of their paychecks.
• Increase your contribution over time: Try increasing your payroll deduction by 1% every quarter until you reach the maximum contribution amount. By increasing your contributions gradually, you may notice only a slight difference in your paycheck.
• Invest a portion of each raise: Each time you get a raise, give your retirement plan a raise as well. You’ll still take home a higher salary and your retirement savings will benefit from increased contributions.
Retirement saving may be more challenging today than it’s ever been. People are living longer than ever and thus must support themselves for an increasing number of years. Spending less money than you earn and making saving a priority are cornerstones for building a plan for retirement.
Keep in mind that a program of regular investing does not ensure a gain or protect against loss. You should always consult a financial professional when making long-term investment plans because everybody’s situation is different. However, one thing is certain, there are real benefits to saving early for retirement.
Advisory services offered through EWG Elevate, Inc. dba Protection Point Advisors.
This represents a partial list of clients. They have not been compensated and were not selected based on duration, performance, account size.