Do you struggle to stretch your low income and make ends meet? Whether you’re living on unemployment, just entering the workforce or received a recent pay cut, saving for retirement might be the last thing on your mind. However, seven tips can boost your retirement savings as you plan for the future.
1. Save Automatically
Instead of feeling discouraged that you don’t have enough cash every month to put toward your retirement, save automatically. Open a 401(k) through your employer and set up automatic deductions each month or set up a recurring monthly transfer from your bank account into your retirement account.
2. Invest Your Tax Refund
Because your tax refund is probably the biggest lump sum check you receive all year, designate a percentage for retirement. Use IRS Form 8888 to deposit part of your refund directly into your retirement account.
3. Increase Your Savings Rate
Every time you receive a raise, increase the percentage of money you save. You won’t miss the few extra dollars each month that help your retirement account grow.
4. Open an IRA
Maybe your employer doesn’t offer a 401(k) or you’re a seasonal or part-time employee. Open an IRA and make regular deposits as you save cash for your future.
5. Don’t Touch Your Retirement Money
No matter what expenses arise, resist the temptation to withdrawal money from your retirement accounts. You’ll end up paying a penalty, and you lose valuable retirement savings.
6. Avoid Get Rich Quick Scams
On every corner, you’ll find an attractive scheme that promises to double your money in one week or pay a huge dividend for a small investment. Resist these scams and invest your money into a retirement account where it’s guaranteed to grow.
7. Start Saving Today
You’re never too old or too young to start saving for retirement. Right now is the best time to get your retirement savings momentum going.
Even with a low income, you can prepare for your retirement thanks to these seven tips. Your Human Resources manager or retirement account rep can also provide additional information as you invest in your future.