Most of you don’t really care what happens when retirement comes along as long as your savings are intact. However, some of you may be surprised at how much you’ll end up getting once you retire. To make the most out of your investment, we will show you 3 ways to increase your retirement savings.
What kind of retirement savings are there?
Here are the most common retirement savings options in the United States:
- Employer retirement funds
- Savings and investments
- Social Security retirement funds
First, let’s discuss Employer Retirement Funds
When you apply to a regular job, you are eligible for a retirement savings fund that your employer keeps in their financial records. Each month, a percentage of your retirement fund is deducted from your salary. Once you retire, the company will reimburse all the funds you collected throughout the years you worked with them.
When you switch jobs, you must transfer your retirement fund to your new company. This will take a bit of work, but it’s better than cashing in your retirement fund. When you choose the latter option, you are at risk of paying income tax and early distribution penalties.
You may also transfer your retirement savings from work to an investment retirement account (IRA). The way your investment will be handled is basically the same, but an IRA may have a different way of handling your retirement savings fund.
Savings and Investments
If you are a business owner, you probably already have a retirement savings fund set aside for yourself. If you are a freelance worker, you may have to set up your own savings and retirement fund.
Should you choose to create a retirement savings account, you can do so at a bank you trust. They may offer you services that will help increase your funds using safe and secure investment protocols. More useful tips that will help you with retirement time you can read here in this retirement planning essay.
Lastly, Social Security retirement funds
When you register for a Social Security number, you are entitled to receive a pension when you retire. This is possible so long as you pay the monthly Social Security taxes while working. You and your dependents are eligible for this pension plan. As for the previous options, you will have to ask the company that is handling your retirement fund.
Now, how do you increase your retirement savings?
For now, you may think your retirement fund will be enough, but ten or twenty years down the line may show otherwise. So here are some options for you to raise the value of your retirement fund:
- Create a separate retirement savings fund that is different from your employer retirement fund and Social Security fund and invest in a fiduciary.
You must create your own retirement fund account and find ways to raise it accordingly. The first way to do this is by assigning your personal retirement fund to a fiduciary. Their job is to increase your money, but prevent it from accruing losses. They are bound by law to make the best financial decisions for their clients.
- Buy blue chip stocks.
Blue chip stocks are the safest bets in the stock market. Before you decide to buy these types of stocks, make sure that you do your research. The return on these investments may be small at first, but the compounding interest will increase by the time you retire.
- Invest in a small business.
Expect a profitable return within 2 years when you invest in someone else’s business. Make sure you are investing in someone who has a product or service that is profitable. The profits you earn from these types of investment will significantly increase your retirement fund savings. Small businesses that have high returns include retail, writing services, digital companies, and many more tech-friendly businesses.
While there are many more options for you to increase your retirement savings fund, these three are the most trusted ways to do so. Do not risk your retirement savings on something that is not a sure bet. You wouldn’t want to be left without any money at all once you retire.