“How much do I need to save for retirement?”
It’s a question that we’ve all asked ourselves and while the answer seems to differ from one person to the next, one thing remains certain…
It’s not only a matter of how much you save, but the way in which you save.
That’s why I’ve listed a few simple tips on how to ensure you’re building your retirement wealth as efficiently as possible.
One of the first things you should do is make sure you’re receiving the biggest savings rate from your current employee sponsored retirement plan.
Most 401(k)-type plans have default rates that automatically deduct the minimum percentage from your paycheck for retirement fund contributions.
But why settle for the bare minimum when you could (and should) save more?
It’s not rocket science. A higher savings rate allows you to save much more over a given period of time.
A good rule of thumb is to shoot to save at least 20% of your annual income.
But studies show that upping the money you set aside for retirement by just 2% has the potential to earn you close to a quarter more in overall savings!
That should be enough incentive in itself to aim for the highest possible savings rate.
With that said, the idea is to work smarter, not harder.
Why continuously funnel your hard-earned cash towards retirement all by yourself when you can get your savings to help you out along the way?
There’s nothing wrong with playing it safe and stashing your money in a fixed rate savings account, but if you’re willing to take a bit of a chance, it’s likely to pay off in the long run.
As the saying goes: “no risk, no reward.”
Pumping your retirement savings into the stock market is a great way to passively build on what you’ve already managed to save at a much faster rate.
For example, the S&P 500 has produced an average annual return of 10% for almost 100 years straight!
Let’s say you’ve been playing your cards right and have already set aside $500,000 worth of retirement savings. Based on this average return rate, you’d earn yourself an EASY fifty-grand per year, just for letting your money sit in this particular index!
Either way, it’s always a good idea to prepare for the worst and diversify your portfolio.
Instead of putting every last penny of your savings into a single company’s stock, you should try to spread your investments out to reduce your risk.
Choosing indexes, such as the S&P 500 or an ETF that’s able to give you a piece of every global market, can act as a one-stop-shop for this kind of market diversification.
As you inch your way closer to retirement, keep these way-to-save tips in mind.
And if you’re interested in diving deeper into planning for retirement and making the most out of your stock market investments, then you’ll want to secure your spot for the upcoming Annual Wealth Summit.
Come escape the winter cold and join us for an exclusive weekend seminar in Orlando, Florida.
You don’t want to miss out on this one-of-a-kind opportunity to receive face-to-face advice from Jim Samson himself on topics ranging from personal development to learning how to trade stocks like the pros.
There’s so much more that comes along with your ticket purchase, but I can’t afford to say it all here.
If you’re even in the slightest bit considering to come, then click here to learn about everything you should expect to receive if you attend.