Few financial topics are more depressing than saving for retirement. Americans are juggling $1 trillion in credit card debt and another trillion-plus in student loan debt, so how the heck are we supposed to save for later when we can’t even save right now?
The answer: Use other people’s expertise. And money. Here are the five must-haves for a comfortable retirement…
1. 401(k)s are more than OK
If your employer offers this, jump on it! Why? Because it’s often FREE MONEY! These retirement plans let you siphon off a portion of your paycheck and deposit into a retirement account without being taxed. So Uncle Sam is chipping in. Not only that, many employers will match some of the money – say, a dime for every dollar you put in. Ask your Human Resources department for details on how to get started.
2. IRAs are the next best thing
If your workplace doesn’t offer a retirement fund, don’t let that stop you. Sign up for a Roth IRA. While you won’t get a free match on your deposits, you still get that tax break – the IRS will let you save the money without taxing it until you take it out many years from now. Meanwhile, you’ll earn interest on all that untaxed money.
3. Make a dent in those debts
While you’re letting your employer and Uncle Sam contribute to your retirement, why not ask your credit card company help you pay down your balances? Yup, they’ll do it – if you know who to ask.
When you call a nonprofit credit counseling agency, you’ll receive a free debt analysis. One option you might hear about is a debt management program. These DMPs, as they’re called, can lower your monthly payments by 30 to 50 percent. How? Because your credit card company will freeze all late fees and penalties, among other things. Once again, it’s someone else lending you a hand. Take it!
4. Head directly to direct deposit
One easy way to save money is to have it automatically deposited into your savings account. You won’t be tempted because you won’t notice its absence. One sure-fire way to start bulking up your retirement savings is to set aside any raise you get – and continue to live on your old salary.