Saving and Investing for Retirement

While most people get shivers thinking about saving and investing for retirement, it is actually not such of a difficult job. Careful planning is important to save for retirement and if you are ready to take care of that, building up a good volume of retirement funds is definitely feasible. In a research conducted by Employee Benefits Research Institute, the bleak state that retirement funds are in, in US, got clearly revealed – 50% of employees who save and invest for retirement accumulate under $25,000 in their retirement funds and 70% of them who don’t, have even lesser – below $10,000. Yes, this is a sorry state no doubt but if you are smarter, it is perfectly possible to build up a substantial amount of retirement money without investing a lot of effort and sweat in it. How? Read on.

Save early

The sooner you start to save for retirement, the better it is. That not only means that you manage to put away more money but it also implicates that when you use this money to invest for retirement, it gets more time to grow and flourish. For instance, if you begin saving at the age of 30 and save till 65 your invested amount will turn up appearing huge at the end of the term ( $100/month saving at 8% rate of interest annually will get you $216,000 at 65 if you start it at 30).

The policy of Dollar cost averaging

The system of Dollar Cost Averaging is a method which is used to cut down the market risks in the course of regular-interval purchase of stocks, mutual funds and bonds. To read the amount of increased money that you are making, you simply need to invest your money systematically into productive investment funds. If the trends are constantly profitable, your money is likely to gain a steady increase over the estimated period of time.

Invest in tax saving schemes

Look for tax-deferred savings plans and invest in them more. If your employer offers you a defined plan for contribution like 401 (k) or 403 (b), go for it. Your payments will cut down on your taxable income volume and the earnings will also be exempt from taxes. Since most employers provide the workers with a varied fare of mutual fund choices, you can also exercise preference and control over your investments here.

In fact, if you are getting a salary hike, you can channelize some funds towards your savings accounts to pile up your savings, instead of spending the full amount. This is a great way to save for retirement and boost up the volume of your savings.

Branch out when you invest for retirement

Depending upon your investment goals and risk factors, you must take care to diversify your savings in different directions while investing. A mixed bag of cash, bond and stock investments is recommended by experts.

Planning for a smooth retirement is possible and if done properly it can be a breeze! You must take care to review your investment plans on a regular basis and make necessary adjustments to make it work in your favor.