Money Saving Tips: Preparing For Retirement

Sep 16, 2021
Money Saving Tips


You may have already heard of the oldest money saving tip: "The best day to start investing was yesterday. The second-best day is today." This is especially true when it comes to retirement. No matter how far away your retirement is, the constant reminders to save for retirement can stress out anyone. With these tips, you can start preparing for retirement today.

 

How To Maximize Savings

Compound interest is often the reason many people try to start saving for retirement early. Compound interest builds on itself over time, so you're earning interest on your interest. The earlier you start putting money into an account that will earn you compounded interest, the more it pays off in the long run. Investing a decade earlier can make a difference of hundreds of thousands of dollars. Retirement accounts offer the best opportunities for tax-advantaged investing. Some people will even apply for a loan then invest that money to jumpstart their savings process.

 

Types Of Retirement Accounts

The most common types of retirement accounts are 401(k) accounts and Individual Retirement Accounts (IRA). There are other types of accounts depending if you work at a nonprofit or if you're self-employed, but we'll focus on the two main branches of retirement accounts.

 

401(k)

Many for-profit employers offer employees 401(k), with the exception of some smaller businesses. If you sign up for a 401(k), your employer will automatically take a certain percentage of your earnings out of your paycheck and put it in an investment account. These accounts are often holdings in a combination of bonds and stock mutual funds. An important money saving tip: if your employer will match your contribution to your 401(k) up to a certain percentage of your salary, you should try to contribute as much as you can to reach that limit. You don't have to pay income tax on the money in your 401(k) when you deposit it, but you do have to pay taxes on it once you withdraw it.

 

Individual Retirement Accounts

You may have heard of a traditional IRA and a Roth IRA. Both plans are arranged through a financial institution other than your employer. They're like a 401(k) because you can hold investments in several financial products: mutual funds, exchange-traded funds, stocks, and bonds. Money saving tip: you can have both an IRA and a 401(k), which might be helpful given government limits on how much you can contribute to each account. The main difference between a traditional IRA and a Roth IRA is when you pay taxes.

 

Roth IRA

With a Roth IRA, you contribute "after-tax," which essentially means you pay taxes once you deposit the money, but you don't pay taxes when you withdraw it. Although keep in mind there are certain age limitations for when you can begin withdrawing the money without penalty. One potential drawback is an income limit for Roth IRAs. If you make above a certain income level every year, the amount you can contribute to the account decreases. If you make above a certain income tier, you cannot hold a Roth IRA at all.

 

Traditional IRA

Money that you deposit into a traditional IRA is pre-tax income, so it has a different tax timeline than a Roth IRA. The amount you contribute to a traditional IRA is tax deductible. You can deduct the amount you invest from your income taxes the year that you deposit it, up to a certain amount. How much you can deduct from your taxes depends on your income. However, you will have to pay taxes when you withdraw the money. For both traditional IRAs and Roth IRAs, you do not have to pay taxes on the growth of the money while it is in the account.

 

Assess How Much You Need To Save

Figuring out how much to save for retirement involves many considerations, some of them difficult. You may need to assess if you will need to move into a retirement home or an assisted living facility, or if you will need to save money for unexpected medical bills. Take into account plans to travel and consider if you will be receiving inheritance in the future. These will all factor into your calculation of how much money you'll need to save to have a good quality of life once you retire.

 

Same-Day Car Title Loan Approval

If you need money today, talk to Rapid Auto Loans. We help you secure auto loans fast, and we have an understanding 10-day grace period for making payments. Money saving tip: talk to Rapid Auto Loans if you need a loan today. Contact us at 954-960-7097 to learn more about what we can do for you.

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Rapid Auto Loans is a consumer finance company licensed under Florida 516. The term title loan is used for marketing purposes only.
All loans have a repayment period of 12 months and there is no minimum prepayment penalty. Interest Rates are determined and approved by the State of Florida based on the borrowed amount and the maximum APR (which includes interest rate plus fees and other costs for a year) is 30%. You pay interest only for the time your loan is outstanding. Below is a representative example of the total cost of the loan, including all applicable fees:
3,233.68

APPROVED LOAN AMOUNT

0.00

Government Fee

25.00

Credit investigative Fee

11.55

Documentary Stamp Tax

3,270.23

Total amount Financed

11/1/2016

Original Loan Date

29.07%

APR

316.39

Monthly Payment (x12)

Rapid Auto uses “Auto Title Loans” for advertisement purposes only and provides auto equity loans. The lenders are licensed under the “Florida Consumer Finance Act” under Florida Statute 516 and as such lenders loans is exempt from any licensing requirements under the “Florida Title Loan Act” to the extent that any of lenders activities involve the making of a loan of money to a consumer secured by bailment of a certificate of title to a motor vehicle.