A Quick Guide to Saving in 2018
Start Saving More NOW! If you started saving for retirement early, chances are you’ll hit your retirement goal. If you’re like most Americans, you didn’t start right away and are playing ‘catch-up’! Don’t put off saving later, start now! If you didn’t start in your 20s, it’s time to start maximizing your savings now because you still have time to make a difference in what you will accumulate.
Don’t Spend More Than You Make. Overspending, credit card debt, and debt in general, will hamper your saving if you’re putting all of your extra income into paying down debt. The important thing is to not live beyond your means; easier said than done, right? Controlling your spending and developing a budget should be a priority for you in 2018. https://www.fool.com/retirement/2017/12/30/how-to-start-saving-money-in-2018.aspx
Max Out Your Retirement Contributions. Roth IRA contributions are $5500 if you’re under 50, $6500 if you’re over 50. In your Pre-Tax retirement accounts, max your contributions at $18,500 and if you’re over 50, $24,500. https://www.cbsnews.com/news/irs-allows-higher-retirement-savings-account-limits-in-2018/
Save Extra Unexpected Money. Maybe you’ve received a bonus at work or inherited money recently. Instead of spending it on things you don’t need, or a lavish vacation, save some of it! And for those of you expecting a tax return, add it to your emergency fund, start or max-fund a Roth IRA, or invest it into another investment. If you have debt, pay it off using that refund!
Get Your Employer Retirement Account Match. Make sure you’re putting enough into your retirement plan at work to get the matching dollars from your employer. If you’re not saving enough to receive a matching contribution from your employer (commonly a 2-4% match), you’re throwing away ‘free money.’ http://money.cnn.com/2018/01/04/retirement/better-retirement-savings/index.html
Take Some Risk. If you have all of your retirement savings in an interest only account, you will not keep up with inflation in retirement. Visit with your financial advisor about having some of your portfolios in the stock market, after having an investor profile completed.
Be Aware of Tax Implications. Part of your retirement savings should be in tax-sheltered accounts. Discuss account options and tax benefits with your financial advisor and your tax professional so you fully understand how taxes will affect your retirement savings now and when you retire. If you’re anticipating retiring in the next 1-2 years, this is crucial as many new retirees don’t realize that their tax brackets may change as a result of liquidating too much from their pre-tax retirement accounts the first five years of their retirement.
Monitor Your Investments. Always meet for a financial review at least yearly to determine if your risk tolerance, fund choices, and timeline until retirement are still on target. Getting financial help is never a bad investment. https://www.nytimes.com/2017/12/03/smarter-living/6-ways-to-be-better-at-money-in-2018.html