Commit to contributing a portion of your paycheck to a retirement plan. By doing so for as long as you are employed, you will be able to plan for a financially secure retirement.
Odds are that you won’t win the lottery or receive a huge inheritance from a deceased relative that will relieve you from financial worries for the rest of your life. Also, counting on Social Security to fund all your expenses in retirement may be too optimistic as well, considering Social Security retirement payments are intended to cover only the most basic living expenses.
Focus on Your Financial Future
The reality is that you have to take matters into your own hands when it comes to preparing for your retirement. The earlier you start planning, the better your chances of having the retirement you’ve always dreamed about. If you haven’t thought much about it yet, you really should start focusing on your future retirement needs.
A good rule of thumb is that you will need 70% to 80% of your salary as retirement income if you hope to have a reasonably comfortable retirement. In order to reach that goal, commit to contributing a portion of your paycheck to a retirement plan for as long as you are employed. There is generally no substitute for regular contributions invested in a broad range of investments that can potentially grow tax-deferred over time.
Go on Autopilot
Making automatic paycheck contributions to a 401(k) or a similar retirement savings plan helps simplify your financial life. You will avoid spending money you don’t have, and you won’t even have to worry about transferring funds electronically or writing a check. Additionally, you won’t have to worry about where to invest each time you contribute to the plan. Your plan contributions are automatically invested in your chosen investment options from the retirement plan’s investment menu.
Saving as a Good Habit
As you watch your retirement savings accumulate over time, you may be motivated to save even more for your future retirement. It may become second nature to find ways to reduce your discretionary spending so that you will be able to set aside more money for your retirement. And whenever you receive a pay raise or a bonus, you may automatically consider saving a portion of it.
|Growing Your Retirement Account|
|You could have this much more saved after:|
|If you increase plan contributions by:||5 years||10 years||20 years||40 years|
This is a hypothetical example used for illustrative purposes only. It assumes amounts are invested on a monthly basis, an average annual total return of 6%, and monthly compounding. It does not represent the result of any particular investment. Your results will be different. Amounts are rounded to the nearest dollar. Source: DST Retirement Solutions, LLC, an SS&C company.
Learn More About Retirement Strategies from Our Experts
Watch the following videos to know more on how to manage your retirement account:
View full playlist here.
Remember you can count on our group of experts at TeleBanco Popular® for access or guidance with use of your 401k digital account at popular.com/401k. Call 787-724-3657, press option 2 two times.
For more information about different retirement strategies available to you, please send an email to our financial expert at email@example.com. Remember, the earlier you start planning, the better for your retirement security.
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