Saving for retirement, some people may think, is an impossible task. Retirement planning and saving can be compared to a marathon. As with some marathons, slow and steady wins the race. With this in mind, the benefits you get from saving not only help you financially, but mentally as well. Below are three benefits you will enjoy from saving now.
1. Not having a well-padded nest egg in your retirement will cause you undue stress in the long run. With the uncertain future of Social Security, dwindling pensions, and the still recovering stock market, retirement planning has never been more difficult. Saving now will give you piece of mind today so you will not have to worry tomorrow. This benefit may sound “cheesy,” but piece of mind is very important during your retirement years. As you can imagine, stress can be very damaging when compounded by years of worry and doubt.
2. A more tangible retirement saving benefit is that by saving now, you will have more to live off later. A no brainer right? If a 30 year old places $500 into a retirement account today, they will give it a chance to grow for the next 30+ years. Each year you wait, each year your money will have less time to grow. We know what you’re thinking, “I’ll just put the $500 in a shoe box under my mattress so I can have access to it as needed.” This is faulty logic due to the fact your money shrinks due to inflation each year. Though you may feel like you’re doing the right thing, that $500 may only be worth $100 in 30 years.
3. Retirement savings are usually tax deferred; this offers a great opportunity for those who save. Also, and depending on your earnings and filing status, contributions to plans such as a Roth IRA are tax deductible. For those who are new to savings, this means an awful lot in terms of getting the most bang for your buck. Also, keep in mind the yearly maximum you can contribute to an IRA is $5,500. By breaking this $5,500 up, and making contributions via weekly/monthly auto payments, you may not miss the money as much.
It would be foolish to rely solely on the government for Social Security payments during your retirement years. Supplementing your retirement by saving today will make it so you can retire comfortably and on time. If you live in the Miami area and need help reaching your retirement goals, contact an accounting service today. There is no time like the present.