SeaComm Federal Credit Union OFFICIAL BLOG

3 Ways to Boost Your Retirement Savings

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When planning for retirement, the earlier you start saving, the better off you’ll be. Consider the following tips, which can boost your savings and help you pursue the retirement you imagine!

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Take advantage of your employer’s 401(k) plan. If your employer offers a traditional 401(k) plan, you’re allowed to contribute pre-tax funds – which is a significant advantage! Because that money comes out of your paycheck before federal income taxes are assessed, your money can grow tax-free. By contributing, you are lowering your tax burden up front, and you won’t have to pay taxes on the investment until you withdraw it…which will most likely be in retirement. Some employers will also match a percentage of employee contributions up to a set portion of total salary, or contribute up to a certain dollar amount. Be sure to inquire with your employer about this potential opportunity!

 

 

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Build your SeaComm Individual Retirement Account (IRA). Consider establishing an IRA to help build your nest egg. You have two investment options with SeaComm:

Traditional IRA: The money you contribute may be deductible from your taxes for the year. Traditional IRAs provide a tax deduction for some people, along with tax-deferred interest. A traditional IRA is best if you believe that your tax rate will be lower at retirement than it is right now.

Roth IRA: Contributions are made with post-tax dollars, which means that you can’t deduct them from your taxable income. The primary benefit of contributing to a Roth is that in retirement, your withdrawals are not taxed at all. Therefore, a Roth IRA is best if you believe your tax rate will be higher at retirement than it is at this moment in time.

Click here to read our “IRA 101” blog article, which outlines even more benefits of building your nest egg with SeaComm!

 

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Don’t wait! Especially if you’re just beginning to put money away for retirement, you should start saving and investing as much as you can now. Here are four good reasons you should be saving as much as possible:

  • You don’t want to rely on Social Security.
  • You don’t want to burden your family.
  • You have access to tax-deferred retirement accounts that will reduce the taxes you pay on your retirement investments.
  • It’s difficult to predict the future…saving now will safeguard you later!

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