You can save for retirement now, regardless of your age or career path. When you save for retirement early, you will have the time to take advantage of compounding interest. By saving now, you can reap great rewards later. These tips will help you save for retirement and build your wealth.
Take advantage of your 401(k) employer match
Make the most of your employer matching your 401(k) contributions. Since contributions are taken from your paycheck before your employer withholds income tax, you might lower your tax bill. If your employer does not match contributions, still invest as much as you can so your earnings have the chance to work in your favor.
Open an individual retirement account (IRA)
You can open an IRA in addition to or instead of a 401(k) plan. Depending on your situation, you may have more investment choices through an IRA. Your income and age come into play when choosing a Traditional or Roth IRA.
With a Traditional IRA, your contributions can grow tax-deferred and your contributions may be tax deductible. If you open a Roth IRA, you will fund it with money that has already been taxed as part of your paycheck. When you make a withdrawal in retirement, the funds will be tax-free. Our wealth management team can help you determine which retirement plan is right for you.
Max out your 401(k)
If you can save and invest more, make additional contributions to your 401(k). You can invest up to $18,500 to your 401(k) in 2018. Contributing an amount of this size would set you on a good track for retirement and reduce your income tax burden.
Make small savings deposits
Your finances change throughout your life. If you are not in the best place to save, remember that every bit counts. Save whatever you can, whenever you can. If you are not ready to commit to an IRA or 401(k), open a savings account and make small deposits each month. The sooner you start to save, the better. Your savings will grow and you can open a retirement account when you are secure financially.
The Wealth Management team at FirstBank Southwest can help you protect and grow your wealth. If you’re unsure what account to open, how to make investments, or need any wealth management help, call us today at 806.322.7241.
Trust Services and Wealth Management Investments are not FDIC insured, are not a deposit or obligation of FirstBank Southwest, are not guaranteed by the depository institution and may lose value.