Six steps to a pension Rich

Simple Keys to your golden years Spent Comfortably

1. Time is money to start today
The most important key to retiring rich is to start saving as soon as possible. Many workers, tied for cash or eying major purchase, telling themselves they can make up for lost time due to increase in future years. Unfortunately, money does not work this way. With the power of compound interest, cash invested today a disproportionate impact on the well-being in retirement.

To put the matter in the future, consider two possible scenarios, as a retirement age of 65 years and is compounded by an annual yield of 10%.

John is 40 years old and invests $ 20,000 a year retirement. Charlotte 21 years and invest $ 5000 a year of retirement. By the time all of these people to retire, they invested $ 400,000 and $ 220,000 respectively. Nevertheless, since the government compound interest, he would have to retire with half the money, as Charlotte, despite investing twice as much! (John will resign from $ 1.97 million, Charlotte with $ 3.26 million).

Moral stories? Stop robbing your future to pay today.

2. The maximum size of the annual contribution limit on your IRA
When it comes to the IRA contribution limits, Uncle Sam motto seems to be "use it or lose it." Employees who have not done the maximum contribution to their traditional or Roth IRA to the date of the flat lucky if they are in their mid-fifties and get catch-up contributions.

3. In full conformity with the employer
Many companies will match up to fifty percent of the contributions of workers to make their 401K and other retirement accounts. If you are lucky enough to work for such matters (and millions of Americans) to take advantage of the full! If you do not, you just walk away from free money.

4. Do not cash out your retirement, when you change jobs.
If you're anything like the average American worker, the chances of a fairly significant change you are going to work at some point during your career. When this happens, the most stupid, what would you do is cash in your retirement plan. Instead, roll over the proceeds into an IRA or your new employer's 401K plan. In addition, to avoid tax penalties, you can keep your money working for you without tax. Given enough time (you have already seen that the power of a few decades could be at first glance, a small amount of money), it literally can mean the difference between holiday in Tahiti, and do not take a job in the Golden Arch to supplement your income

5. Avoid IRA withdrawal fees
There are many ways of withdrawing money from your retirement account in the event of an emergency. Before you even think about it is absolutely sure that you have done everything necessary to get - otherwise you get a very unpleasant and expensive after a call when you are beaten perhaps thousands of dollars of fees and fines.

6. Expand Pie
It is not only to reduce costs - to find a way to earn more money! Taking on the job or of turning a hobby into a business enterprise, you can create additional revenue streams to fund your retirement. In many cases, this is an excellent alternative for reducing costs, since it allows you to save your current standard of living, while at the same time for your future.

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