It’s never too late to start saving for retirement or your kids’ education, and the earlier you start, the better off you’ll be when the time comes. Here are some top tips on how you can quickly build your savings from a financial planner in Fort Smith, AR.
Start Saving Early
The sooner you start saving for retirement, the more time your money has to grow. Find a financial advisor to work with who can give you insight into the best ways to grow your money early.
You’ll benefit from compounding interest over years and decades, not just a few months or years. If you wait until you’re in your fifties to begin contributing to a company-sponsored 401(k) plan, for example, you’ll probably end up with less than if you had started earlier at age 25.
Start Saving with Small Amounts
You will make the most progress when you save regularly – whatever amount is comfortable for your income and lifestyle.
Consider setting aside some of each paycheck into an IRA or 529 college savings plan, even if it’s only $20 or $50 per month. Even small amounts will add up over time.
Start Saving in Tax-Effective Vehicles
If you have a traditional 401(k) plan with your employer, invest as much as possible via pre-tax contributions (if allowed). That way, your money has more time to grow tax-deferred until you start making withdrawals in retirement.
It can be beneficial to speak with a financial planner in Fort Smith, AR, to find the best tax vehicles for your career and lifestyle.
Set up Automatic Payments to Your Savings Account
If you’re diligent about saving a portion of your income every month, do it automatically, so you don’t have to think about it. It’s the best way to make sure the money is actually transferred.
For example, sign up for an automatic savings plan with your bank or work directly with your employer to set up payroll deductions for company-sponsored retirement plans.
