How Saving has Become a Big Part of My Life, and Why it Should for You Too
English: ceramic piggy bank (Photo credit: Wikipedia)
It is a practice I started way back, fifteen years ago to be exact; and I have seen the benefits of saving some money for my retirement and any other future need. I started saving small amounts at the beginning, and truth be told; it was no easy task at the start. USA Today reports: Savers slowly attaining higher rates of saving.
Over the years, saving has become second nature; the saving culture has become part and parcel of my day to day life and I have thus been able to comfortably increase the amount of money I have been saving every month for this purpose. I devised a working plan, I did set for certain achievable goals and I intend to stick to my plan to the very end to ensure I secure my sunset years.
Even though I was already signed up with my employers 401 (K); I was not satisfied with it being my sole source of retirement benefits. I realized this after carefully identifying my future retirement needs with some experts. I know for a fact that I will need around 90% of my pre-retirement income to maintain my current standard of living once I retire.
I therefore sought advice again from a professional and settled for an individual Retirement Account (IRA). Because I am not yet over 50, I do save $5000 a year into this account; I intend to increase this once my age hits 51. To ensure consistency, I did set it up in such a way that these amounts are automatically deducted from my savings account and deposited to my Traditional IRA account. Due to the tax deferral benefits, I am able to compound my returns because I will only pay tax once when I withdraw these funds at retirement.
I am currently on my second year investing in fixed rate bonds; it’s a good idea to find the best fixed rate bonds because they are a safe investment option and they don’t attract any state or local tax. The withdrawals are also not age related and there are no penalties for withdrawing the savings before the magic 59 years. I also like it because I have been able to save up to $10,000 and thus double my tax deferred contributions annually by purchasing the bonds.
The other day I did come across some very informative articles that were showing the attractiveness of saving for retirement and other future needs using fixed rate bonds; after going through the articles, I must confess that I think it is a good idea to find the best fixed rate bonds around and invest in them soonest. They are safe, quite predictable and relatively easy to manage and understand.
Category: Banking, Saving Money
