7 ways to boost your savings
Simple steps to help build your financial foundation
Although saving more takes some effort, it may be easier than you think - there may even be "free" money available that can help. Here are some helpful tips:
1. Take advantage of an employer match
If your employer will match 4%, you've just covered 6% of your retirement savings goal when you add in your contribution. While the specifics vary, many companies will match whatever you contribute to the retirement plan (up to a certain percentage of your income).
2. Increase your savings rate by 1% a year.
Whether in an IRA, a 401(k) or some other dedicated account, this small change means you'll be at 15% within 10 years without even feeling it.
3. Look for additional savings opportunities at work.
Ask if your employer offers a corporate profit-sharing plan, employee stock purchase plan, or employee stock ownership plans, which can provide you with company stock at no cost as part of overall compensation.
4. Put money aside in tax-deferred accounts.
Consider saving in a tax-deferred account such as a 401(k) or traditional IRA. Doing so can cut your tax bill. Contributions to a Roth IRA, by contrast, are not tax deductible, but they can grow tax-free. Earnings may be taxed if withdrawn before you've held the account for five years.
5. Consolidate your financial accounts.
This may help you take advantage of potentially lower costs. Don't assume a bank is your only choice for check writing, bill pay, and savings. Consider applying whatever savings you achive to a brokerage account or retirement fund.
6. Pay yourself first.
Schedule automatic monthly transfers from your checking or savings account into your retirement account. This keeps you on track and also ensures that you're investing consistently, regardless of market fluctuations.
7. Find a credit card that deposits cash back into your retirement account.
Careful here - this only works if you diligently pay off the card balance each and every month.
The strategies above do not assuer a profit and do not protect against loss. They involve continuous monitoring and investment regardless of fluctuating price levels of such securities. Investors should consider their financial ability to continue purchases through periods of low price levels.
Investing involves risk, including the possible loss of capital. There is no assurance that any investment strategy will be successful. Withdrawals from tax-deferred accounts may be subject to income taxes, and prior to age 59 1/2 a 10% federal penalty tax may also apply.