Five Easy Ways to Save for Retirement
3. Save your raises
When you get a salary increase, immediately put the extra money into retirement savings. Since your budget and spending are built around your current income, you don’t need the additional money now anyway. If you divert it to savings right away before you get used to living on it, you’ll never miss the money.
4. Take advantage of tax credits
Tax-advantaged retirement investing, especially if you aren’t rich, has become very easy to do. You can make pre-tax contributions to a 401(k) if your employer offers one as well as to a traditional or Roth IRA. Since you don’t pay taxes on the money you’re contributing, each contribution costs you less, and the government essentially gives you free money for retirement. If you contribute $1,000 and are in the 22% tax bracket, this could save you up to $220 on your tax bill. Your $1,000 contribution would cost you only $780.
