David Lerner Associates: 3 Retirement Saving Tips

There are many ways to achieve financial security through your golden years, and the sooner you start preparing, the better. Unfortunately, many Americans approaching retirement are not ready and may have to delay retirement or work part-time to meet their expenses.

Here are three retirement saving tips that can help you achieve the goal of a financially secure retirement:

1. Enroll in a retirement plan

Start as early as possible. There are several options: 401(k), IRA, SEP, and Roth IRA. If you’re employed, enroll in the company 401(k). Your contributions will be automatically deducted from your paycheck before taxes are taken out, and, in many cases, the employer matches the amount put into the account. If you’re self-employed or a small business owner, look into setting up an IRA or SEP IRA.

2. Get professional investment advice

That old saying, “Don’t put all your eggs in one basket,” could have been coined for investments. Seek professional advice, and perhaps make sure that any investment you make falls into the category of “the sensible middle ground of investing” rather than chasing financial rainbows. It may make sense to look for investments that, while not guaranteed, regularly pay dividends or interest.

3. Make your mortgage an asset

Keep a close eye on the value of your home and current interest rates. Refinancing your mortgage at a better interest rate could lower your monthly payment and free up funds to put into your retirement account. Check out your options with this mortgage calculator. There are closing costs when you refinance, so be sure to figure out all the costs before you refinance, and make sure it is going to be a smart financial move.

Another strategy could be to pay off more than the monthly amount required and pay off the mortgage faster. That way you save money on the interest, and there is more equity in your home.

For example: A $200,000 30-year home loan with an interest rate of 5% would cost $186,512 in interest. If you add the equivalent of one extra payment a year, the loan will be fully paid in 26 years. That means you pay $153,813 in interest — a savings of $32,699. [4]; that’s a significant saving that could go towards your retirement fund.

Following these tips could make a difference in the quality of your retirement. Make sure all the information used in decision making is correct before embarking on any strategies. Retirement is an important part of life. Make sure it is treated with the respect it deserves.

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.