Smart Actions to Maximize Retirement Income

No matter if you are a recent college grad and are looking to begin your career, or if you have been in the working world for a decade, retirement may be the last thing on your mind as you are more focused on making money and starting a family, but the fact is it actually is not that far away, and the longer you wait to build up your retirement account, the less you will have to live off of when you need it most.

Maximize 401(k) Contributions

If you are not contributing at all, well then stop now and make the necessary changes to ensure you are funding your future.  How much to contribute will depend on your available money, but if your company offers any matching contributions, then you should at least be using that as a starting point, otherwise that will be leaving free money on the table.  From there you can look to increase your contributions every year, and anytime you get a raise or pay off debt, you can use the savings to increase your contribution percentage as well.  Every year you wait could decrease your balance significantly by the time you retire.

Create a Budget

We all could use a little extra money, but creating a budget may be a way to lower expenses and increase the cash on hand in order to add funding for retirement.  If you can allocate funds for monthly bills, plus setting aside to use for spending on food, gas, and entertainment, and can stick to that amount, it may eliminate unnecessary purchase and free up quite a bit of money.  You can even take it a step further and make sure you go over last month’s statement and review each purchase line by line, see what could have been avoided and add it up.

Build Up an Emergency Fund

You never know what life may throw at you, so it is good to be prepared in any aspect.  If you are making significant progress in funding your future and living on a strict budget, what is something happens like a car repair, or even worse, a job loss?  If you can have a few months’ worth of expenses sitting in a savings account for quick cash if needed, it will avoid putting on a credit card and making you go into debt if a huge unexpected charge hits you.

Stay Out of Debt

This may be common sense, but it is still worth nothing that if you are planning on getting ahead financially, you can’t keep taking steps back by getting in debt, so do your best to avoid carrying over a credit card balance and getting out of hand, wasting money on interest when you could be using that money for your future.  If you have more money going out versus coming in over the course of the month, then something is wrong and adjustments need to be made.  It’s tough, and those that are secure financially sure didn’t get that way easily.

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