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How to Save for Retirement

Aug 9, 2012

Posted by

Kris Miller

As a PREtirement and living trust expert and National Speaker, Kris Miller assists people in developing complete estate packages. Her practice focuses on helping seniors reduce their tax liabilities, Read more

Savings are very important in retirement planning.  This is what you are going to have available to spend during your retirement period. Do you have enough savings to cover you for your retirement? Saving is not easy, especially when you have a lot of expenses to pay, like monthly bills, food and emergencies. Here are some ways to help save enough money for your retirement.

First, calculate how much money you will need.  Then calculate how much money you will have to save every year in order to have that much retirement money available. Only a few people are doing calculations when it comes to retirement savings. Most people are just guessing how much money they need, and that’s why they fail. Making calculations will make you realize how much money you need and how little time you have. This will help you think of other strategies and to work harder.

Second, review your retirement contributions.  Maybe you need to add more to attain the ideal amount you need for your retirement.

Third, make huge contributions at the end of the year. Take advantage of the time of the year where you can give more. Know how much you can contribute for your 401(k) for the year and learn the limits. Grab your chance to have traditional IRAs and Roth IRAs tax advantage accounts. 

Fourth, if you find that you would want to contribute more to 401(k) above the limit, you can try opening an after-tax savings account. You do not have to settle on the limit they are setting, you can have more if you want.

Fifth, if you are a freelancer or not working, you can save for your retirement through Roth IRAs and Spousal IRAs. The Roth IRAs are for people whose jobs change and are unstable like freelancers and students, while Spousal IRAs are for spouses who do not work. After paying the taxes, you can make your contributions and you can decide how much money you want to contribute.

Finally, it is also important to keep in mind the taxes you are going to pay for your retirement income. This way you can make the necessary adjustments for your finances.

With a little bit of planning, you will have a better idea of how and when to save.  Always consult a financial adviser to make sure you are taking full advantage of the opportunities that you have right now.  Later can be too late.