If you are a person in his or her 30s, then you are at a perfect age to begin to seriously plan for your retirement years. With your retirement approximately three decades away, you have a full range of options open to you. The following are three tips to start planning for your retirement.
Start saving today
This may seem obvious, but it is the single biggest problem people have when planning for their retirement. Saving money takes discipline, but it needs to be habitual as well. Set aside a certain amount of money each payday that will be used for your retirement. Do not touch this money for any reason. After awhile, you will be able to save money for your retirement automatically without thinking about it.
Invest some of your savings in the stock market
You need to place a small amount of your savings into stocks. It doesn’t have to be a lot. Only use a small amount of your savings for your retirement. Over a 30 year period, the stock market will most likely prove to be your best investment for your retirement. It is a simple matter to place your money in a mutual fund that is indexed to the Dow Industrial average.
Create a retirement account
There are very good retirement accounts that can be set up to provide you will significant income in your retirement years. A traditional Individual Retirement Account or a Roth IRA are typical choices. They both offer tax advantages. A traditional IRA gives you a tax credit each year that you make a contribution. When you retire, the money is taxed as you withdraw it. A Roth IRA does not provide any tax advantage today, but when you retire, you can withdraw the money without paying any income taxes. This includes the interest earned on the money in a Roth IRA account.
A Miami tax preparer will be able to answer any questions you have about retirement accounts. Accounting services in Miami can assist you other ideas on saving for your retirement.