retirement savings You will be able to freely control your non-working period. Having sufficient retirement savings allows you to achieve a level of self-sufficiency and enable you to live a happy and independent life in retirement. When you save for retirement, you can take advantage of the power of compound interest to grow your savings.
Whether you’re nearing retirement or a young professional just starting out in the world of retirement planning, it helps to have the right strategies in place. Below, we’ll discuss four ways to increase your retirement savings.
1. Invest in a Self-Directed Securities Account (SDBA).
The SDBA is a unique investment account in a retirement plan that allows you to invest beyond the typical options offered. Unlike traditional retirement plans that limit participants to pre-selected investment options, becoming an SDBA investor allows you to invest in individual stocks, mutual funds, ETFs, and bonds outside of the base plan products, as well as REITs. You can choose from advanced investments such as trust). Investing in an SDBA to grow your retirement savings provides several benefits, including:
- Increased investment options: SDBAs unlock a variety of investment options beyond the traditional limits of employer-sponsored retirement plans. Expanded investment options now allow you to tailor your portfolio to your financial goals
- Potential for improved diversification: Diversification allows you to invest in a variety of assets, reducing the impact of poor performance in one investment on your entire portfolio.
and pathfinder retirement or any other trusted investment platform, you can invest in SDBA to grow your retirement savings.
2. Start saving early
Starting saving for retirement early enough can have a big impact on your savings in the long run. Because retirement can be decades away, money saved now has much more time to compound and accumulate and will be worth more in retirement than anything you save in the future. You may not have much to save, but starting small can have a big impact because it will take longer for your money to grow.
3. Open an IRA (Individual Retirement Account)
An IRA is an account you set up with a financial institution to save money for retirement on a tax-deferred basis or tax-free growth. The different types of IRAs you can invest in to grow your retirement savings include:
- Traditional IRA: With this IRA, you may be eligible for a tax deduction in the year you contribute. If you withdraw the money later, you will pay taxes on the entire amount withdrawn. but, There are some rules for withdrawing money from a traditional IRA
- Roth IRA: Does not provide immediate tax relief. Rather, you’ll pay taxes on your income now and contribute it to your Roth IRA. This means that when you withdraw your savings after retirement, you don’t have to pay taxes. However, there are no requirements for withdrawing earnings from a Roth IRA.
4. Leverage catch-up contributions
Catch-up contributions allow people aged 50 and over to make additional retirement savings on a tax-advantaged basis. This increase is in place for savers who started saving for retirement late or who were forced to delay contributions for any reason. These additional savings will help you catch up. However, even if you fall behind, you can still try to catch up. This means you can take advantage of catch-up contributions to maximize your ability to save for retirement.
Endnotes
With sufficient retirement savings, you can enjoy a happy and independent life after you quit your job. Investing in an SBDA, starting saving early, opening an IRA, and making catch-up contributions are ways to increase your retirement savings.
