Start now to prepare your retirement savings fund. Preparing now will allow you to reach your financial goals in the future. Here are three ideas to help you get started.
Start a Side Business
Starting a side business can help you start saving for retirement early. Starting a side business will require you to invest some time, energy, and effort, but there are many ways that you can do this. As you actively seek out opportunities for a side business, you will find that there are many creative ways to make money without taking away from your other responsibilities. Many people don’t realize that you can be saving into an IRA or solo 401(k) if you own your own business. This is one compelling benefit of starting a side business. Before opening a solo 401(k), you need to register for an employer identification number (EIN).
Contribute to a Spousal Roth IRA
Contributing to an IRA is a great way to jump start your retirement savings for both you and your spouse. You need to have earned income (taxable compensation) in order to contribute to a Roth IRA. However, if you are married, you can contribute to your spouse’s Roth IRA even if they don’t work. Since the IRA is an individual account (Individual Retirement Account), contributing to a spousal Roth IRA means that each spouse has their own IRA, just one spouse funds both. In order to do this, you need to have enough earned income to cover both contributions. Roth IRA contributions are a good option because they go in after tax and grow tax-free. Retirement and assisted living are expensive, so make sure you have budgeted for the lifestyle you want.
Get Out of Debt Early
Debt is one of the biggest inhibitors for retirement savings. If you have the financial ability to pay back your debts ahead of schedule, you should do so. Paying off debt early will allow you to be free of monthly payments and use that money for your retirement savings account. One of the best ways to pay off debt early is by paying extra as often as possible. As long as you still have the sufficient means to cover your other important expenses, paying extra when possible will help offset the amount you’ll pay in interest. However, some loans come with penalties for paying it off early, so make sure to be aware of these.
Starting a side business, contributing to a spousal Roth IRA, and getting out of debt early are three effective ways that you can jump start your retirement savings fund. Putting in effort now will help you save effort and money in the future.
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