Many people haven’t done the proper planning for retirement. They don’t have enough money to live the type of life that they want to live when they retire. One of the reasons for this is that they haven’t taken the time to consider that they may live for many years after retirement. In order to keep their current lifestyle, they will need to make up the difference between what they make now and what they will receive from Social Security.
Those is in the Millennial generation need to start planning for retirement right now. Noted financial expert David Giertz has several recommendations to help with designing a comfortable retirement.
All those who are still working should contribute the maximum amount to their Individual Retirement Account (IRA). Individuals can contribute up to $5,500 per year unless they are in the year when they will reach 50. Then they can contribute up to $6,500 tax free.
David Giertz also recommends that everyone contribute as much as possible to their 401K plan. This is especially important if the worker’s company matches a portion of the worker’s contribution. This money can build up significantly over time providing a nice nest egg for future retirement plans.
Individuals can contribute up to $18,500 per year starting in 2018 to their 401K plan. Those over 49 are allowed to contribute an additional $6,000 per year.
Another important way to save for retirement that David Giertz recommends is fully contributing to a Health Savings Account (HSA). These accounts let workers contribute up to $3,450 per year tax free as long as the money is used for healthcare expenditures. However, once the HSA account holder reaches the age of 65, he can use the money tax free for whatever purpose he wishes.
Keeping these tips in mind will help Millennials save for a better retirement. It’s never too soon to plan for retirement.