If you are in your fifties, still working in your job, but are concerned that you don?t have enough savings set aside for retirement then this can be a real concern.? You might be wondering if there is anything you can do in order to improve your chances of a happy and stress-free retirement with no financial worries.? Fortunately there are a number of strategies that you can embark on in order to plan better for your retirement, and it?s not too late to start ? although you are going to have to make some drastic changes to your lifestyle.? Read on for some top-level advice and places to start.
You Must Start Saving Money Today
There really is no other option; you need to start saving money today.? Please don?t worry about any strategy at this point, just start putting money by ? you can figure out how to make the best use of it later.? As a general guide you should be saving at least 10% of your gross income, and even more than that if possible.? We advise two different methods to saving money for retirement: the first method is to pay off any high-interest debts you have and get those shifted.
The second saving method we would recommend is to save funds which is where you tax code becomes relevant.? Make sure that you use your employer?s 401(k) plan where your contributions will be excluded from your annual income.? If you are lucky your company might even match your contributions too which is a double-bonus.
Reduce Your Tax Payments with a 401(k) Scheme
If you are in the 25% bracket then by saving $10,000 you will be able to reduce your tax payments by $2,500 dollars every year.? The law allows you to save over twenty thousand dollars annually of your own personal contributions before tax.? Please seek professional advice on this matter because it is one of the best ways in which you can start to save money in your 50s before your retirement.
If the company you work for does not run a 401(k) scheme then you can open up a personal retirement account using a mutual funds broker where you can save off up to six thousand dollars before tax every 12 months.
How a Second Job Can Help Your Retirement Funds
It is also possible to save up tax-free savings with income generated from a side-line business or second job.? Having a secondary income is another great way in which to prepare for retirement because it will still provide an income once you are no longer working.? As an example, if you use eBay to sell second hand furniture and are bringing in $7,000 dollars a year doing this then you might be able to save this money off into a Simple IRA or special savings plan for the self-employed.
Risk-Free Approaches to Investing Retirement Funds
If you have some money saved up for retirement then the majority of 401(k) plans do have mutual-fund options ? or if the money is in a Simple IRA then you can invest this pretty much anywhere you like.? If you don?t like to take risks with your money then we would recommend that you should consider low-cost bond funds where the chances of losing money is vastly reduced ? although the returns will never be as high obviously.
As your money pot grows larger then it will be prudent to take a few more qualified risks.? One of the better approaches is to look at taking some percentage of your retirement savings and investing it in equities of a low-cost mutual fund variety.?
Need Help Planning for Retirement?
If you are concerned about retirement and want up to date advice on how you should be using your money, then you should consider a subscription to the Retirement Weekly newsletter from MarketWatch.? The newsletter is available either via email or in magazine format and is edited by Robert Powell who is a trusted financial advisor specializing in retirement issues.? For more information please visit Retirement Weekly.
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