Gain the Financial Advantage
Saving for your future can be challenging, especially when your paychecks are going towards the present. You spend so much time juggling bill payments and additional expenses that it can seem nearly impossible to save money. But, with a good 401k plan and alternate means of saving, you can get on the right track towards reaching a financially secure retirement.
Anticipate All Expenses
Even though your living expenses during retirement may only be 70% to 80% of those before retiring, try to remember that you will not have your normal paycheck and your Social Security benefits will probably not be large enough to let you live the lifestyle you want.
The actual amount you will need depends on your anticipated expenses, the level of Social Security benefits, your tax situation, the earnings rate on your savings and your goals about leaving money to heirs. It can get pretty complicated, but the bottom line is that you will probably need and want a large retirement nest egg. The best ways to have those funds are to take advantage of employer provided retirement plans and other options while you are still working.
Enroll in a 401k Plan
If your employer offers a 401k plan or some other form of retirement plan, be sure to participate. The funds you accumulate there can be a large source – if not the major source – of your retirement income. In addition, these plans have benefits to make the process easier and more effective. They are convenient, most employers add to your contributions, your earnings are tax deferred and many plans offer investment flexibility.
To help you maximize the benefits of a 401k plan, here are four ways you can contribute.
Alternate Retirement Options
Funds from your retirement plan and your Social Security benefits can provide a great deal for all of your needs, but there are other options you may want to consider.
A Bank of Hawaii Deposit IRA or Investment IRA may be a useful tool for helping you reach your retirement goals.