One of the most effective ways to increase your savings is to take advantage of the power of compound interest. Compound interest provides the opportunity to earn interest on the initial investment and then also earn interest on the interest throughout the life of the investment.
Specialists like Matt Dixon, a Registered Financial Consultant in Greenville, SC, work with people of all ages and in all stages of their life to develop effective retirement plans. Unfortunately, many younger professionals and those starting out their careers fail to take advantage of some of the saving options that can help them build their retirement nest egg and even plan for early retirement.
Maximize Employer 401(k) Contributions
There are many benefits to putting money into an employer 401(k0. This is true even if the employer does not offer matching funds. The money is put into the account pre-tax, which means you pay less today and, with strategic withdrawals in retirement, you can reduce the amount of tax paid on the investment.
Consider Investment Opportunities
One common mistake advisors like Matt Dixon see is a failure of young adults to take advantage of investment opportunities outside of 401(k). The Roth IRA offers the option to invest after tax and allows you to withdraw in retirement completely tax-free.
Another investment for those in Greenville, SC, can be specific types of insurance. For example, disability insurance can protect your retirement savings in the event you cannot work. Life insurance is another consideration, and a whole life insurance policy can build equity over time with low monthly payments.
There are multiple options Matt Dixon can discuss based on your current income and goals. It is never too early to start saving for your retirement, and getting started today is a wise financial decision.
