If you want to save more money in 2021, you are not alone. A Fidelity Investments study found that 44% of Americans want to increase their savings rate.

Increasing your retirement savings may be your ultimate financial goal this year because investigation found that 27% of respondents stopped saving for their retirement in 2020. Another quarter (26%) of Americans have yet to start saving for their retirement, according to a Federal Reserve study.

Whether you’re paying for health care, adding to a college savings account, or investing in the stock market, making smart financial decisions over time can help you reach your retirement goal.

If you are planning for retirement and don’t want to leave money on the table, you can maximize your income with these high yield savings options in the Credible Market.

5 SIMPLE STEPS TO TURN YOUR RETIREMENT SAVINGS INTO SURDRIVE

How can I make sure I have a solid financial plan to prepare for my retirement?

There are several ways to save money for short-term expenses and retirement savings.

It’s also important to recognize Social Security, another form of retirement benefit for older Americans or people with disabilities. Your Social Security benefits may vary depending on your retirement age, although the traditional age is 65. Here are eight ways to help you prepare for your finances for retirement:

1. Build an emergency fund
2. Create CD ladder
3. Save 20% of your income
4. Determine your retirement budget
5. Set a retirement savings goal
6. Identify the debt to be repaid
7. Win a 401 (k) match
8. Contribute to an IRA

1. Create an emergency fund

Saving at least three months of cash in an emergency fund should be your first priority. You can use your emergency fund instead of your retirement savings to avoid an early withdrawal penalty when a surprise bill arrives or unexpected life events occur.

A high yield savings account or money market account can generate a higher annual percentage return (APY) than a traditional savings account. These FDIC insured deposit accounts also may not have monthly service charges or minimum balance requirements.

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2. Create a CD ladder

A CD ladder is a deposit strategy used to save money over different durations – like six months, a year, etc. – to take advantage of higher interest rates.

After saving for an emergency fund, you can put your money in a bank certificate of deposit (CD) to earn a fixed interest rate that can be higher than a savings account while avoiding the volatility that supports the investment in shares.

CDs can generate higher interest rates than future savings account returns if the Fed benchmark rate falls. You can renew the balance to a new APY on the due date. Savers can also withdraw without penalty during the grace period.

3. Save 20% of your income

Putting the 50/30/20 budget rule into practice can motivate you to save at least 20% of your income for your future financial goals, from retirement to a down payment at home. Look for ways to cut spending to save money (20%) and pay your essential (50%) and non-essential (30%) bills.

You can schedule automated deposits into a high yield savings account, CD, or investment account. You can also mobile deposit an additional debt payment if the interest rate is greater than your potential ROI.

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4. Determine your retirement budget

Your personal situation determines how much you should save for retirement. Start by calculating your current expenses, your planned post-retirement expenses and your benefits.

You can use these numbers to estimate your monthly and annual retirement expenses.

5. Set a retirement savings goal

The “Rule of 25” is a simple way to determine your retirement savings goal by multiplying your annual expenses by 25. For example, $ 40,000 multiplied by 25 means you need a nest egg of at least 1. million bucks.

Generally, a retirement savings calculator is a great tool to estimate how much you need to set aside each month to reach your goal.

THE BEST RETIREMENT PLANNING TIPS EVERYONE CAN FOLLOW TO SAVE MORE MONEY, EVEN IN A PANDEMIC

6. Identify the debt to be repaid

You can consolidate your high interest debt like credit cards by comparing personal loan options with an online marketplace like Credible.

After paying off the higher interest rates, you could focus on student loans and mortgage debt. An online tool like Credible compares student loan refinancing rates from several lenders at once without affecting your credit score.

You can send a loan repayment by wire transfer to reduce your credit utilization rate. decreases, you can save or invest your old monthly payment.

7. Win a 401 (k) match

If your employer offers 401 (k) equivalent contributions, consider investing enough to earn the full match. This “free money” grows tax-sheltered and can make retirement planning easier.

If you are self-employed, however, a solo 401 (k) account is your best bet for having the same benefits as a traditional 401 (k) account. Additionally, a Roth 401 (k) has a defined contribution plan, limiting those under 50 to $ 19,500 in 2021.

Having the right 401 (k) plan can help you plan for a soft landing in retirement, just like an IRA.

8. Contribute to an IRA

Paying off your debt can improve your credit history, but also give you more money to invest for retirement. A tax-efficient individual retirement account (IRA) is an effective way to reduce your taxable income.

You may prefer a Roth IRA because you are making contributions with after-tax dollars, but withdrawals are tax-free.

A traditional IRA is the best option if you want an initial tax deduction for the amount of the contribution. However, each withdrawal is taxable and you may need to save more to offset taxes. Using an IRA calculator is a simple way to determine the value of your contributions in retirement.

It’s important to note that Roth and traditional IRAs have annual contribution limits. In 2021, your contributions cannot exceed $ 6,000 if you are under 50 and $ 7,000 if you are over 50.

Also, a SIMPLE IRA (Employee Savings Incentive Matching Plan) differs from a Roth and a traditional IRA in the amount you are able to contribute. It is generally suitable for small businesses with fewer employees, according to the IRS, and an employer can equal two or three percent for each employee.

Final thoughts

Making saving a priority can help you reach your financial goals. To start saving for retirement, you must first focus on your ability to afford a financial emergency. Then you can tackle debt while building long-term wealth.

Making informed investment decisions, seeing a financial advisor, and correcting bad credit are just some of the many ways to prepare for retirement.

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