- Learn more about your employer’s pension plan – If your employer has opted for a traditional pension plan, you can check to see if you’re covered. Also, you should learn more about how it works. Ask for an individual benefit statement to see what your benefits are. If you decide to change jobs, ask more about what will happen to your pension benefit.
- Consider basic investment principles – Another important secret is how you save can be just as important as how much you save. Inflation and the type of investments you make can play an important role in how much you’ll have saved for retirement. Become an expert on your plan’s investment options. Ask all the questions. Your investment mix can change over time, but it doesn’t necessarily mean it has to affect you.
- Don’t touch your savings – If you withdraw your retirement savings earlier, you will be making a big mistake. You will lose interest, tax benefits, or you’ll be obliged to pay withdrawal penalties. If you decide to change your job, you can always leave your savings invested in the current retirement plan, and roll them over to an IRA.
- You can always ask your employer to start a plan – If you haven’t received any offer from your employer, you should suggest one. There are many saving plan options available. Your employer can set up a simplified plan from which you can both benefit.
- You can put money into an Individual Retirement Account – You can store up to $6,000 a year into an Individual Retirement Account (IRA). Even better, if you are 50 or older, you can contribute even more. You can also contribute with less. IRAs have many tax advantages. When you decide on an IRA, you have two options: either a traditional one or a Roth IRA. The tax treatment of your contributions and withdrawals will vary depending on which option you select.
- Find out all about your Social Security benefits – Social Security retirement benefits replace 40% of pre-retirement income for retirement beneficiaries. You could estimate your benefit by using the retirement estimator on the Social Security Administration’s website.
- Ask the right questions – These tips won’t be enough. You’ll need to ask for more information. You can talk to your employer, your bank, your financial advisor, or your union.
