3 Easy Ways to Save for Retirement

a retired couple walking on a beach

It might be hard to imagine life after 67, but it’s important to save for retirement!

How will you pay your bills? What about healthcare? Will you still have a mortgage? 

Persons Banking Company wants to help you plan for the future, so keep reading to learn three easy ways to save for retirement.

3 Easy Ways to Save for Retirement

Tip 1: Know How Much You Need to Save

According to The Department of Labor, the average American spends more than 20 years in retirement, but  only half of Americans have calculated how much they need to save.

So don’t bury your head in the sand. The Department of Labor has a free Lifetime Income Calculator that will help you assess your retirement readiness and plan for your retirement. 

Once you determine how much you’ll need in retirement, start saving. Every little bit helps, so stick to it!

Related: 4 Personal Savings Questions Answered

Tip 2: Open an IRA

IRAs–or Individual Retirement Accounts–are a great way to save for retirement. 

There are two types of IRAs:

  • A Traditional IRA, which offers tax-deferred interest, or
  • A Roth IRA, which features tax-free withdrawals in retirement 

Persons Banking Company offers competitive, variable interest rates that vary with the term you choose. 

You can open your IRA with a minimum of just $500!

Note: It’s important that you consult with your tax advisor to determine the best IRA for you.

Contribute to Your 401K

A 401K is an employee sponsored retirement plan, and there are two types:

  1. Traditional: Your contributions are pre-tax, meaning your taxable income is reduced, but your withdrawals are taxed. 
  2. Roth: Your contributions are made with after-tax income and there are no tax deductions in the contribution year, but withdrawals are tax-free. 

If your employer offers to match what you contribute to your 401K, we strongly suggest you meet that match. 

Once again, talk with your tax advisor before making a decision about your 401K.

To Sum It Up

Saving for retirement should be a priority, and there are several ways to get started! 

  • Secondly, open an IRA. Persons Banking Company can help you. 
  • Lastly, contribute to the 401K plan your employer offers. 

Need more guidance? Give us a call or stop by one of our branches. We’re happy to help.

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