1. Contribute at least the amount that your employer matches to your 401k.
If you’re fortunate enough to have an employer who offers 401k matching, by all means, take advantage of that! Not only is it basically free money, but you’ll get tax breaks and low-cost investment options.
2. Open a Roth IRA, and invest the funds.
Individual Retirement Accounts are retirement savings accounts with tax breaks, in which the funds are generally invested. A Roth IRA is typically not taxed when you withdraw the funds. If you have more time between now and retirement, investing your Roth IRA funds could be an effective way to grow your money. If you’re under the age of 50, the annual contribution limit is $5,500; if you’re over age 50, it’s $6,500.
3. Get with a financial advisor to review your current financial plan and make future plans towards retirement.
You hire doctors for their expertise; why not seek the counsel of a financial advisor? They can give you a professional opinion of your financial situation, and help you navigate the tricky world of investing.
4. Be on track to have your mortgage paid off by retirement.
Perhaps the most immediate thing you could do now is work to pay off your mortgage. Once in retirement, you’ll most likely be on a fixed income, and paying off your mortgage will become more difficult. Plus, your mortgage is an investment, and handling that investment wisely will contribute to the good of your retirement as well.
5. As you get closer to retirement, go to the Social Security website to get your income estimate to make sure you’re on track.
For more help on retirement investing, please contact our Investment Services team at 865.425.2730.