6 Steps to Save More in 2016

The beginning of a new year is a great time to reflect on your long-term goals. Are you on track toward building a comfortable nest egg for retirement? If you’ve realized that you need to make some adjustments to your savings plan, good for you! Seeing the need for a change is the first step to success. Now follow these six steps to saving more money in 2016. You’ll thank yourself when you retire!

Reap your maximum company match amount. If you just can’t save the maximum amount each year, at least try to reach your company match amount. Your employer is basically giving you free money for retirement, so strive to reap the entire match amount each year.

Take advantage of any raises you receive. Any time you receive a raise from your employer, adjust your payroll withholding upward. You can save more for retirement without even missing the money from your spending budget.

Make the maximum contribution to your retirement fund. Check your pay stubs, and do some quick math. At your current rate of saving, will you reach the maximum 401(k) contribution this year? If you aren’t contributing the maximum allowable amount each year, you’re missing out on valuable tax savings. Not to mention, making the maximum contribution of $18,000 each year is the best way to achieve your retirement savings goals.

Make a catch-up contribution, if you’re eligible. If you’re age 50 or older, you can contribute an additional $6,000 per year, for a total of $24,000 of savings. Catch-up contributions carry the same tax benefits, so don’t leave money sitting on the table!

Open an Individual Retirement Account (IRA). If you’re contributing the maximum amount to your 401(k) each year, but still want to save more for retirement, open an IRA. You can stash an additional $5,500 each year, or $6,500 if you’re age 50 or older, on a taxes-deferred basis.

Claim your Saver’s Credit when you file your taxes. Don’t forget this important tax credit. Depending upon your tax bracket and the amount you save for retirement each year, you can earn a tax credit between 10 and 50 percent of the amount of your contributions! If you receive an income tax refund, stash that in a savings vehicle as well!

For more information on saving for retirement, give us a call. We can show you the various advantages of each savings strategy, and help you put together a plan that works for your situation.

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