When you retire are you relying on Social Security and pensions to help you through retirement? I hope not!
There's plenty of debate over whether Social Security will still be around when us 20- and 30-somethings retire. However, many companies no longer offer pensions to their employees anymore, so for many of us, that's no longer an option.
So, how are we going to make it through our retirement years?
Are you contributing to your (and/or your spouse's) 401(k)? If not, does your company match your contributions? If they do, and you're either not participating or not contributing up to the maximum company match, you are just throwing money away that your employer is willing to give you! Many companies will either offer a 1-to-1 match (for example, if you contribute 3% of your salary, they will also contribute 3%) or they will offer a partial match (if you contribute 4%, they will contribute 2%).
How can you increase your retirement savings?
- Try increasing your 401(k) percentage by just 1% and see what the effect on your paycheck is. Since, the money is pre-tax, it will not feel like a full 1%, since you are not paying federal, state, or local taxes on it (although you are still paying social security and medicare taxes on it).
- When you get a raise, try increasing your percentage savings. Chances are you won't even miss it, since it's money you weren't getting before anyway. For example, you or your spouse gets a 3% cost of living increase. Do you really need the full 3% for your household needs? Try taking 1 or 2% of the raise and put it away in your 401(k).
- If you find that you're getting a big tax refund each year, contribute some of your tax refund money into an IRA (and most likely claim it on that year's tax return). Hopefully, you won't even miss it!
Do you feel like you're saving enough for retirement? Do you have a retirement fund (401(k), IRA, etc)? Have you thought about increasing your retirement savings?