U.S. Money Reserve has laid out the best strategies when it comes to long term plans of action to save for retirement. There are three key pieces to consider for an effective retirement plan. One is careful strategic thinking and planning. Two personalizing your approach. Finally, three of which suggest a plan that can span 10 years or more. There are four steps to take under these guidelines to ensure the most bang for your buck when it comes to retirement.
Taking small steps, in the long run, is one of the key components to retirement success according to U.S. Money Reserve. The first step to take is to begin setting aside just 1% extra each month. This small incremental change to budgeting begins to compound over time. As the percentage of saving each month increases begin changing external things such as eating out, carpooling, consolidating debt and lowering credit card rates.
The second thing to consider is the power of compounding interest on savings. U.S. Money Reserve says along with setting aside 1% and compounding interest you can see huge retirement gains. Compound interest means earning a percentage off the initial sum of cash in an account. Then after those returns are added making the pile larger, the interest percentage is based on that. For example, $1,000 at 10% interest means 1100 at the end of a period. Now 10% of $1,100 is a $110 increase making $1,210. Another 10% period would mean now a $1,331 total. As you can see compounding interest exponentially increases over time.
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Number three is to open a self-directed IRA account. Having direct control means you have access to a wider array of investments. You could invest in stocks, bonds, mutual funds, metals, real estate, and franchise interests to name a few. Most people opt for paper-based assets over non-paper based assets. One good reason to consider non-paper assets like metals or in particular gold is the log term security it offers. The value of gold means it can deliver during economic hardship if that were to arise.
Finally, the fourth thing to do is to maximize 401k catch-up contributions. If you’re 50 and over catch-up contributions allow an additional $6,000. This means exceeding the usual limit on 401k contributions. as the name implies catch-up contributions are for those who missed out on 401k contribution and need to make up for it. The US money Reserve suggests doing these four things along with a well thought out plan, a personalized approach and the ability to sustain the plan for 10 years or more.
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