Save Early, Save Often, Start Now
By Melissa Phipps, About.com Guide
- Retirement Plan Step #1 - Start Saving
- Retirement Plan Step #2 - Use Your 401(k) Plan
- Retirement Plan Step #3 - An Employer Matching Program Means Free Money!
- Retirement Plan Step #4 - Don’t Forget The IRA’s
- Retirement Plan Step #5 - A Roth IRA Could Be Even Better
Retirement Plan Step #1 - Start Saving
The only way to create wealth is to save. Only by saving will you have money in the bank or otherwise invested. By the time retirement rolls around, the dollars you save today may have grown many times over. The key is to begin and to begin soon. Thanks to the miracle of compounding interest, it is the money you save today that has the opportunity to grow by the most. Each year you wait can be costly, so make sure to save enough.
- 4 Steps to Retirement Saving
- Retirement Saving Considerations
- The Saver's Credit - How the Government Might Help You Save for Retirement
- How Much Money Will You Need in Retirement?
- Users Respond: See what others think about retirement savings
- Glossary of Retirement Planning Terms
Retirement Plan Step #2 - Use Your 401(k) Plan
Although not every employee will have a 401(k) plan available, those who do will be hard-pressed to find another retirement planning opportunity as lucrative. Thanks to the benefits of tax-deferral and automatic savings, your account balance could grow faster than you previously thought possible. Plus, you’re unlikely to take your money spontaneously (That’s a good thing because you want it to be there for your retirement).
A 403(b) or a 457 plan may be available to some employees instead of a 401(k) plan and, if so, typically work very similarly. Don't have access to any of these plans? Check out IRAs.
- What is a 401(k) Plan?
- Are You Eligible to Contribute to a 401(k) Plan?
- 2010 401(k) Contribution Limits
- 401(k) Withdrawal Rules
- Roth 401(k) Plans
Retirement Plan Step #3 - An Employer Matching Program Means Free Money!
If your employer offers a matching program as part of your 401(k) plan, you’ll have the opportunity to receive additional funding for your retirement at no cost to you. But to receive the funding, you need to participate to a certain level in your 401(k) plan. However, this is a no-brainer! After all, you’d never knowingly say “No” to free money, right?
- Make the Most of Your 401(k) Match
- What are 401(k) Vesting Schedules?
- All About Cliff Vesting Schedules
- Understanding Graded Vesting Schedules
Retirement Plan Step #4 - Don’t Forget The IRA’s
A traditional IRA contribution allows your money to grow tax-deferred. Depending on your income, tax filing status, and ability for you (and/or your spouse) to contribute to a workplace retirement account, your IRA contribution may even be tax deductible, further saving you money on this year’s taxes.
- What are Individual Retirement Accounts (IRAs)?
- How to Open an IRA
- 2010 IRA Contribution Limits
- IRA Rollovers
- How to Roll Over an IRA
- How to Avoid Mandatory Witholding on an IRA Rollover
- IRA Withdrawal Rules
- Do I need a Spousal IRA?
Retirement Plan Step #5 - A Roth IRA Could Be Even Better
Imagine access to a retirement fund without having to pay income taxes. It could happen – through the Roth IRA. Although you won’t receive a tax deduction for any contributions you make, your money grows tax-free, making it a truly fantastic place to begin saving for retirement.
- What are Roth IRAs?
- Who Can Contribute to a Roth IRA?
- Can I Contribute to both a Roth IRA and a regular IRA?