Social Security used to provide people with a sense of security about retirement, but the growing cost of living and age requirements for pension are concerning younger Americans. One to two generations prior, it was much easier to buy a home and pay it off before you were in old age. Those in their 20s and 30s had certain security about their future that isn’t as common among today’s working population. That’s why thinking ahead about retirement is such a good idea no matter how old you are. The younger you start, the better off you’ll be.
These three methods of saving for retirement are meant to be conventional rather than traditional. You already likely know about individual retirement accounts (IRAs) and 401ks. So, to help you expand your opportunity to finance your senior years, these are three methods that have even more benefits you can use now.
|App||Fees and Minimum||Best for:|
|Betterment||0.25% per year|
no account minimum
|Saving for retirement|
|Ellevest||$1-$9 per month|
no account minimum
|Retirement especially for women|
|Personal Capital||Free||Planning retirement|
Start Clipping Coupons
You can save hundreds of dollars a year if you start taking advantage of savings. Look if your favorite stores have apps, which tend to offer exclusive discounts just for using them. Sign up for any rewards clubs, and use browser extensions like Honey to compare prices online before buying. Whatever you save each year, add it up and put it in an account toward retirement. Directly depositing it into your savings and matching whatever you can out of your personal finances is a good annual habit.
Sell Your Life Insurance Policy
You can get a free online estimate to see how much your policy is worth. Reducing costs to free up savings can also result in a generous lump sum payment if you sell your coverage. There are resources that can help you decide whether this is the right choice for you. Life insurance is a versatile tool that many people use to fuel their retirement savings. Many policies also generate a cash value that can become extremely profitable after 20 or 30 years of consistent payments. Selling a life insurance policy can be one of the fastest ways to generate a large sum of money to put toward retirement. In many cases, you have to be near or past retirement age to sell a policy, but you can borrow from a cash value much younger than that.
Use Cash Gifts to Build Savings
Birthday money, Christmas bonuses, and any other financial gifts can become investments in your future. It’s okay to split some in half and treat yourself, but think about impulsive buys vs. long-term benefits. In most cases, you’ll get much more out of building a reliable savings account than you will from a spontaneous buy. To stay additionally motivated, you can plan ahead and think about things you’d like to do during your retirement. Envisioning that cross-country European trek can make it easier to put that bonus into savings. A budgeting app can also help you stay on track with your savings. It’s important to strike a balance between spending money and savings to avoid losing motivation; a budgeting app helps you set goals, track progress, and stay on track.