There's no doubt about it - we're in tough economic times and if you're trying to save for retirement on a limited budget, I really and truly feel your pain. After all, it is hard enough living day-to-day trying to make ends meet. However, even though money is tight, you really shouldn't give up on your dreams of retirement. Instead, you should start saving now. In this article, I will give you some proven tips you can use to save for retirement regardless of your current financial situation. Are you ready? Let's begin.
Figure out how much money you need. If you are thirty or forty you have more time to save than if you are sixty. Either way, you need to evaluate your needs and your wants. For instance, how soon will you retire? Where will you live? What type of lifestyle do you want to live once you retirement? Will you work part time or not at al? These are all factors that you really should keep in mind. Start tracking your spending now. To get an accurate listing, make sure that you do this on a weekly basis. Track all of your purchases for an entire month. This includes coffee, tea, snacks, car washes, gas, everything. Evaluate the information that you obtained and then see where you can make cut backs. For instance, you may be able to cut unnecessary expenses Develop a spending plan. With your data in place, you need to develop a realistic spending plan. Include mortgage, rent, utilities, etc. By doing this, you will have an accurate accounting of how much money you can set aside for retirement. If you find that you don't have anything after cutting expenses, you need to generate more income. This can be done by starting a small business or getting a part time job. Any funds you obtain from these sources should be used to fund your retirement plan. Next, figure out where you'll put the money. You might consider an Individual retirement account, either a traditional or a ROTH IRA, either way you can. However, keep in mind that both of these have very different benefits and tax ramifications. For instance, when you have a Roth IRA, there is no set withdrawal age, the contributions are not tax deductible, and if you follow set rules, earnings and principal is 100% tax free. In contrast, with a traditional IRA, you must wait until you are 59.5 to withdraw the funds and the contributions are tax deductible. To help you decide, talk to an experienced financial consultant. In conclusion, you must take control of your financial future now. By figuring out your goals, tracking your sending, developing a spending plan and being smart with your money, you will be able to save money for your retirement regardless of your current situation. Good luck.
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