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The majority of Americans start saving for retirement too late in life, or many others fail to save enough throughout their working years. If you want to fully retire when you reach your senior years, you will have to set realistic goals early in life. These goals should ensure you’ll have enough saved by retirement age to ensure you won’t have to continue working late in your life.

Take a Step Back

Rather than focusing on the $1 million you need to have at retirement age, it can be more helpful to focus on what you need to save year by year. This strategy is less intimidating because it allows you to focus on smaller numbers. As you save year by year, you’ll get closer to the full amount you need for retirement without overwhelming yourself with the big picture. It’s also easier to budget for these smaller contributions as you manage your monthly finances.

Stick With the Same Percentage

As a general rule, financial advisors recommend contributing up to 15% of your salary into a retirement savings account. This ratio should remain consistent throughout your working years. Even when you get a raise or start a more lucrative career path, you should still be contributing 15% towards your retirement. This will ensure you’re saving more for retirement when you can afford it. You’ll also save less when you experience a downturn in your income rate.

Get the Employer’s Matching Contributions

If your employer offers a 401k program as a part of your benefits package, you should participate in the program as soon as you’re eligible. When you do start your 401k plan, be sure you’re contributing up to the percentage that your employer will match. You should also read up on the rules for getting those matching contributions vested. This may require you to stay with the same employer for ten years, but doing so will help you double your retirement savings.

It’s also important to take advantage of the available tax breaks offered by the IRS. This includes deferring income taxes on contributions of up to $18,000 in a 401(k). You can enjoy a similar deferment when you contribute up to $5,500 into an IRA. These incentives help you save upfront on your total taxable income while also encouraging you to save more for your retirement.

“Some information on this website was written by BrandYourself, a non-affiliate of Cetera Advisors LLC”