Chris O'Shea
Retirement can seem far away, but time moves fast, and it can creep up on you. That means you should be thinking of how you’ll afford your golden years way before they arrive. Here are three moves to make that will help set you up for a comfortable retirement. Do them now before the year is over.
1. Match It
If the company you work for has a 401(k) plan, that’s great. And if the plan has a contribution match, that’s even better.
- Check with your company to see how much you need to contribute to get the match.
- Find out the percentage or dollar amount your employer will match.
- Aim to contribute enough to get the match.
- If you need time to save enough to get the full match, that’s fine, just do what you need to do to get the full match.
The employer or company match is free money you don’t want to leave on the table. That’s especially true if you have many years before retirement.
2. Save, Save, Save
Everyone is different, but you should aim to save as much as possible for retirement as you can. Not sure how much to save? You can use a retirement calculator. You can also go by the general advice that you should save about 15 percent of your income for your golden years.
3. Play Catch Up
If you are older or later in your career, take advantage of catch-up contributions.
How Much Can You Contribute?
- IRAs. If you’re over 50, you can save an extra $1,000 in your IRA, bringing the total to $8,000.
- 401(k)s. For those over 50 with a 401(k), you can save up to $31,000. That’s an extra $7,500 in catch-up contributions.
Those under 50 can only contribute $23,500 to their 401(k).
Do One Thing: Make sure you are using a 401(k) employer match if your company offers one.
Jean Chatzky
