The truth is that retirement planning in NJ doesn’t have to disrupt your quality of life. By putting away a small amount of money today, you can build up your savings, grow your financial security and retire when you want. Below are some tips for starting a retirement plan you can live with.
Start Small, But Stick to Your Goals
Saving money is a rewarding habit, so it’s important to make it a priority. Start small and try to increase the amount you save over time. The sooner you start saving, the longer you’ll have to grow your money. Ask our financial advisors in NJ about your options for no-minimum, no-fee retirement accounts.
Know Your Retirement Needs
Experts estimate that Americans need 70 to 90 percent of their pre-retirement income to maintain their current standard of living. If you’re not sure how much money you’ll need to retire, you can use a retirement calculator or work with your financial planner in NJ to get a better idea. As you get closer to retirement, these numbers will be more accurate.
Contribute to Your Employer’s 401(k) Plan
Many employers offer some type of retirement savings plan such as a 401(k) plan. Sign up for this plan and contribute what you can. Even though your paycheck will be smaller, your taxes will be lower, your company will kick in more and the deductions are automatic. You’ll be getting paid every month while putting money toward your retirement.
Learn about Your Employer’s Pension Plan
Your employer may offer a standard pension plan as well. Ask for an individual benefit statement and speak with your financial advisor about whether or not this plan is right for you. There are pros and cons to using a pension plan to save for retirement.
Put Money into an IRA
If your employer doesn’t offer a 401(k) plan, consider opening up an individual retirement account (IRA). You can put up to $6,000 a year into an IRA and even more if you are 50 or older. IRAs also provide tax benefits, allowing you to keep more of your money. There are two options for IRAs - a traditional IRA and a Roth IRA. Talk to your retirement planner about which one is right for you.
Build an Emergency Fund
Another important thing to do is create an emergency fund so that you don’t have to rely on credit cards or your retirement savings if something goes wrong. Ideally, you’ll want to have six months saved up, but anything is better than nothing. Setting up automatic deposits is the best way to ensure your money is going to the right places.
You don’t need to have a high-earning career to retire rich. All you need is to start saving your money at a young age. This gives you plenty of time to grow your savings, make more aggressive investments and get used to automatic deposits. To learn more about retirement planning in New Jersey, contact Leonard Financial Solutions today.