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Getting started in saving for retirement is an important step that everyone should take. Those who reach their 60s or 70s will invariably have to slow down, and having some money stashed away to take care of living expenses is a necessity because Social Security alone will provide a very lean retirement. Planning ahead for retirement should take precedence over many other plans for the future. Without money, it will be difficult to participate in fun activities in retirement. 

Start Saving Today

It’s important to get an early start when saving for retirement. The longer a person saves, the longer compound interest will have an opportunity to work and build a nest egg. A portfolio that earns a 7% return will double in a little more than ten years, and a person who starts at age 20 would be able to turn every $1,000 into $8,000 if he or she left it alone for 40 years. A person waiting to start until 50 would only see the same $1,000 turn into $2,000 by age 60. This does not take any additional savings into account, but it provides a striking example. The more a person invests, the more she’ll have in the future. 

Try To Max Out

As of 2022, most people can save $20,5000 per year in a work-based retirement plan like a 401k. Saving this much money would take some hard work, but it will be worth it in the future for those who can achieve it. Additionally, it’s possible for most people to save $6,000 in an individual retirement account. Those who are older than age 50 can save even more. As noted above, every dollar saved early in life will be a dollar that can work hard toward providing a healthy income in retirement. 

Plan For Social Security

It’s possible to start drawing Social Security at age 62 as long as you’ve worked enough quarters to qualify. However, waiting until age 67 or age 70 will lead to a higher monthly payout. Those who think they’ll have a tight budget in retirement should wait until the last possible minute to max out their income. 

Planning for retirement is imperative. Many people fail to do so, and they frequently have trouble making ends meet. Having a solid plan will increase the likelihood of a comfortable retirement that provides for some real enjoyment.