- Personal Finance»
Saving Up For Your Retirement Years - Having a Retirement Plan
Saving up for Retirement
When we are thinking about everyday money management, we ought to also be thinking ahead for the retirement years. It is easy to put off, because we always have immediate needs, or needs we can foresee say 10 years down the road. Thinking much further than that often doesn't occur to many people. Young people especially might not be thinking too far ahead in this regard, but it never is too early to plan for your retirement years.
There is no need to deny yourself day to day needs like food shelter and clothing for fear of being poor in the later years. Its about being wise both now and being wise for later on. Some people just wish they had extra time on their side, when it comes to planning ahead. That is the goal, to get you thinking now for a time that just seems far away. Later you will wish you had done so.
In fact the sooner you start saving now for those retirement years, the less you will have to save to live well when that time comes. The reason this is true, is that your money will have more time to compound, to multiply.
Taking advantage of the time you have
Some experts have said that if you have more then a 10 year time frame to work with, then invest your money for the long term. If you are younger, you may have time to take advantage of the potential growth that we see from some investments. A good example is equities, so why not look into that? Clearly, you don't want to do more "gambling" types of investments closer to retirement. If you are young and have the time, you may be able to take advantage of the more aggressive types of investments that offer higher degrees of possible growth.
Another tip is to not be too conservative in your retirement savings. Sometimes, younger people can make the mistake of being more conservative, even too conservative in their retirement strategy. Even if you are closer to retirement, you don't want to forget that you might live a long time, and your funds will need to grow.
Sheltering your Retirement
It is a good idea to take advantage of opportunities to protect or shelter your retirement money from income taxes. There are opportunities that offer a tax deferred features, so look into those options if that seems appealing to you now. You can protect your money from current income taxes through an individual retirement account (IRA), an annuity, or a company sponsored retirement plan.
Some people open an IRA to take advantage of tax deferred growth, even if they have a retirement plan/program at their workplace. You may not receive a tax deduction on your IRA contributions, if you are covered by a company sponsored plan (depending on your income level). Even if you don't receive a tax deduction, you still get the tax deferred growth. Find out what is true and applicable to you right now, and hopefully these ideas can point you in the right direction.
Even if you don't have access to a company sponsored program, and no matter how far along in life you are, its never too late to start saving for your older years. Putting any amount of money aside/away, into the best savings option for you is wise and you won't regret that.
Now more than ever, people are living longer and longer, and things like Social Security are looking like they will be very tight for future generations. While we need to keep trying to be wise as we can, and vote in ways that show we don't like wasteful spending in the government, we need to also plan ahead for ourselves.