If you are working, saving for retirement can easily be done through payroll deductions.
- If your employer offers a Retirement Savings Plan, such as a 401k, contribute as much as you can, especially if your employer is matching your contribution
- If your employer offers a Pension Plan, find out about your coverage and what benefits you will receive under the plan
People are living longer than before. This means that if you are planning on retiring at age 65, you be living in retirement for another 20-30 years. You need to make sure you have the funds to support yourself and your family during that time.
If you decide to set up a Retirement Savings Plan, make sure to not withdraw money from the plan early unless it is an extenuating circumstance. The reason is that an early withdrawal creates the following:
- The money withdrawn is penalized
- You will most likely owe income tax on the money withdrawn
- Reducing the amount of money you have growing for retirement years will jeopardize your future financial security