When you’re young, it seems like retirement is something that is far away. Because of this, many young people avoid putting any money away for their retirement and end up falling short. Even if your funds are tight due to circumstances like raising a family, you always need to keep a focus on your retirement. Thankfully, there are several ways to get started on your path to secure and comfortable life in your old age.
401K
If your job offers a 401K as part of your benefits package, take advantage of it. There are several reasons to do this. The first is, of course, an investment in your retirement. A 401K is designed for the long-term. You allocate funds each paycheck pre-tax to go straight into the fund so it’s, in essence, a forced saving that’s very easy to do. Secondly, a 401K is something that can help with a down payment for a car or your first home. While you should refrain from using it, a percentage of the money is available once fully invested and you pay yourself back with interest.
Gold
Gold also works for the long-term, which makes it ideal for retirement. It may go up significantly or go down. However, overall, gold remains something tangible that retains its value. When the markets are unstable, gold will provide security for your retirement.
Real Estate Investment Trust (REIT)
When you are in your thirties and have small children, funds may be tight. Real estate can prove a worthy investment to help you start your savings. Coming up with the necessary deposit for the investment, however, is almost an impossible task. The good news is that you can still invest in properties through a REIT. You can use a broker to make the investment and the holder of the property must pay dividends. There are several different types of REITs, so finding the right one will require some research. To make the search easier, you can use a website capture service such as Evernote to save the results for future reference.
Treasury Bills
Treasury bills (often referred to as T bills) come with the backing of the United States government. What this means is that your investment is virtually a guarantee. They are designed for the short term, usually with a maximum maturity date of up to 1 year. For instance, if you purchase one for, say, $1,000.00 you only need 970.00 for the investment. When it matures you’ll receive payment for the full $1,000.00. The more you invest, the better the return. It’s not a get rich quick scheme, but it does allow you to transfer money annually into retirement savings.
Personal IRA
Individual IRA accounts are a good investment for your retirement. There are several advantages to them. First, there’s no tax due annually, meaning that the money you invest isn’t figured into your annual taxes. Once you reach retirement, you collect the funds and include the entire account as part of your return. Benefit two is that you can deduct your annual contribution for your tax return yearly which will reduce the amount you owe. A disadvantage to using this type of account for your retirement is that you’re not eligible to collect the funds until you reach the age of 59.5 years.
Money Market Account
If you want to start saving money, but are unsure of how it will work for you, a money market account may offer an initial start to help you save for your retirement. They have a higher interest rate versus a typical bank savings account but still provide the reassurance of the ability to use the funds if needed.
Saving for your retirement is something that should remain present in every being. Whether you’re young fresh out of college or newly married and starting a family, the focus on your retirement begins now.