Simple and Effective Ways to Plan for Retirement

January 15, 2019
Posted in Insights
January 15, 2019 DCT Capital Fund

If you are looking for financial security when you retire, but you aren’t sure how to get there, then this is the perfect article for you. Unfortunately, this isn’t something that magically happens. It takes lots of thinking, planning, responsibility, and money. Achieving a happy life as a retiree can be a long process, and there are many ways to achieve this like doing real estate investing. Along with this, here are some simple and effective ways to plan for retirement.

Save, save, save

You have to start somewhere in order to build up a retirement fund, and it should begin with finding ways to save money. This does not mean to start deducting big chunks of cash from your account. It’s okay to start small, but you need to do it as soon as possible, so you have more time to grow the fund. Make a retirement plan to save money and stick to it.

Use Your Employer’s Retirement Savings Plan

In case you didn’t know, some employers offer a retirement savings plan such a 401(k). If this option is available to you, sign up and start contributing. Your taxes are going to decrease and the automatic deductions make it easier on you. Make sure to do some extra research on your plan and find out how much you need to get the complete employer contribution and how long you should stay in the plan to receive the money.

If your employer does not provide this option, it does not hurt to ask them to start one. There are many different retirement savings plans out there. If you make the suggestion, your employer might set one up that is going to beneficial for the both of you.

Look more into your employer’s pension plan

Your employer might have a traditional pension plan. Find out if you are covered and learn more about it. You should ask for a benefit statement, so you know if it’s beneficial enough. You might even have benefits from a previous employer or from your partner’s plan.

Set up an IRA

IRA stands for Individual Retirement Account. This can also help you save up for retirement and includes tax advantages. If you are under the age of 50, you can contribute $6,000 a year into the account.

It’s important to know that there are two options when setting up an IRA: Traditional and Roth. Each offers different tax benefits. Traditional IRAs provide tax-deferred growth potential and Roth IRAs provide tax-free growth potential. For those that are eligible, the Roth IRA tends to be the preferred option because the rules are more flexible, it does not have as many restrictions as the traditional IRA and passing money to your inheritors is easier.

Reaching financial independence for retirement is a long-term process that requires commitment, but always remember to create a plan with small achievable goals that are going to lead you to your ultimate goal.