Tips to Maximize Your Nest Egg

No matter where you are at in your career, whether you are just out of college, or are even nearing retirement, it is good to ask yourself how much you need in retirement and track to see your progress.  If you are like most that unfortunately do not seem to be adequately saving for retirement, now is as good of time as any to get the ball rolling to be in control of your financial future.

The Earlier You Start the Better

Just going by simple math, if you have decades left until you retire, you can contribute very little each month and, along with a growth rate, could put you in a great position to have the funds you need in retirement, but what about if you have not done as good of job as you should have, or haven’t contributed at all?  Well you will have to start now, and you will have to contribute a significant amount, and the longer you wait the more that amount goes up, and you could seriously be putting yourself in jeopardy of not having anything down the road.

Don’t Leave Money on the Table

If you are able to take advantage of a company 401(k) account and your employer matching contributions up a certain amount, say 6%, you could be missing out on thousands of dollars a year that could be put into your account.  If you are unsure how much to contribute to 401(k), so can’t put together a large amount to give, you should at least be doing the maximum company matching contributions as a minimum, and from there you can gradually increase contributions each year and work with a financial planner if needed.

Out of Sight Out of Mind

Direct deposit is a beautiful thing, so you do not have to manually transfer money over to a savings account, and risk avoiding missing the transfer and spending the money instead.  If you are in and out of your checking and savings accounts there is more temptation to build a savings account, but the hope that you are starting to see a real balance rise each month could be incentive enough where you don’t want to touch and start to have goals of where you would like the balance to be.  If you never know it’s there, you can’t spend it.

Don’t Get Used to Available Funds

Sure, it is great to have a nice annual merit increase, or a large year-end bonus, but the more you get used to having extra funds in your account, the more likely you will be to spend.  If you are getting annual merit increases, this would be a great time to increase 401(k) contributions so that your raise will be absorbed for retirement.  As far as bonus, it may not be the most fun option, but certainly debt pay off or building an emergency fund in case unexpected charges occur where you need available cash is a great place to put any extra money you come across.

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