6 Ways You Can Save For Retirement

Retirement may seem far away, but the sooner you start saving, the more secure your future will be. Many people rely on Social Security benefits or pension plans, but it’s important to have other sources of income to ensure you can support a comfortable retirement lifestyle, even if you are planning on moving to New Zealand or elsewhere to live, you need a strategy in place to unlock your money when retirement is around the corner. Here are six ways you can save for retirement.

1. Maximize your employer’s 401(k) plan

A 401(k) is a retirement savings plan offered by many employers. You contribute a portion of your paycheck into the plan, and often, your employer will match a percentage of your contributions. If your employer offers a 401(k), it’s a great way to start saving for retirement. You can contribute up to $19,500 in 2022, and those over 50 can contribute an additional $6,500. Be sure to take advantage of any employer match offered to you, as it’s essentially free money.

2. Open an Individual Retirement Account (IRA)

An IRA is a personal savings account designed for retirement. You can open an IRA through a bank or investment firm, and contributions are tax-deductible or tax-free, depending on the type of IRA you choose. There are two types of IRAs: Traditional and Roth. With a Traditional IRA, you can deduct your contributions from your taxes, but you’ll pay taxes on withdrawals in retirement. With a Roth IRA, you contribute after-tax dollars, but your withdrawals are tax-free in retirement.

3. Invest in mutual funds

Mutual funds are a type of investment that pools money from multiple investors to buy a portfolio of stocks, bonds, or other securities. Investing in mutual funds can help diversify your portfolio and provide potential growth for your retirement savings. However, it’s important to research and choose mutual funds that align with your risk tolerance and retirement goals.

4. Consider a health savings account (HSA)

A health savings account is a tax-advantaged savings account designed for medical expenses. If you have a high-deductible health plan, you may be eligible to contribute to an HSA. Contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free. Any funds not used for medical expenses can be invested and saved for retirement.

5. Pay off high-interest debt

Paying off high-interest debt, such as credit cards or personal loans, can free up funds to contribute to your retirement savings. High-interest debt can also hinder your ability to save for retirement, as the interest can accumulate quickly and eat into your savings. Make a plan to pay off high-interest debt as soon as possible, and redirect those funds to your retirement savings.

6. Cut back on expenses

Cutting back on expenses can help you save more for retirement. Review your monthly expenses and see where you can make cuts. Small changes, such as eating out less or canceling subscriptions, can add up over time. Redirect those savings to your retirement savings.

Although saving for retirement requires discipline and planning, the earlier you start, the more comfortable your retirement will be.  As you near retirement age, an effective plan will help you unlock money to spend on your golden years and one strategy may be making the move to downgrade your family home to something smaller by hiring a team of professional removalists to help you when the time comes to move. This will free up a huge amount of capital you can then divert into the other strategies above.