There comes a point in life when you need to stop working and retire. At that point, it’s crucial that you have enough money saved up to support yourself. Not enough money at retirement will turn into an absolute nightmare. So how can you prepare? How can you make sure that your retirement is a luxurious one? Here are three helpful tips.
A Solo 401(k)
If you are self-employed, you must deal with a major drawback. You don’t have an employer matched 401(k). The problem with this is that you can’t take advantage of tax-free interest on your savings. The solution to this is to set up a solo 401(k). In order to qualify you are going to need to be the owner of your business and have no employees. You will also need an EIN. Having an EIN also comes with a whole host of other benefits. These include, identity theft protection, avoiding tax penalties, business loans, and business bank accounts to name a few.
Health Savings Account
When you age, your medical bills are going to increase. This can take a serious chunk out of your savings. You can prepare now with a health savings account. Contributions to a health savings account are tax-deductible. You can then use the money in this account for qualified medical expenses. An even better part is that you can earn interest on the amount of money in your health savings account and this income isn’t taxable. You do the math, but hopefully you can see how this can provide you with some massive savings. Keep in mind that there are limits to how much money you can put into a health savings account and requirements regarding the type of healthcare coverage you must have.
Invest
Lots of people talk about saving money for retirement. However, you don’t want to just save money. You want to invest it. The problem with saving money is that it may not even keep up with inflation. If you invest money, your money starts to work for you to generate more income. Some people say that investment is risky. Everything is risky. Investing is only risky if you don’t take the time to learn to do it properly. There are so many different ways to invest. You need to research these methods and find one that fits you.
No matter what age you are, you need to start preparing for your retirement now. The sooner you start saving, the better off you will be. Don’t wait. Time isn’t something that you can get back. You will thank yourself later on if you choose to make the small sacrifice now to contribute to a retirement plan.
If you’re ready to secure your retirement, contact us and we can help you make a plan!
