5 tips to maximize your retirement savings

Planning for retirement can be tricky. What should you be doing right now? How do you best prepare? How much money should you be contributing and to where?

By planning properly, and starting early (experts suggest in your 20s), you can save up enough to comfortably retire.

As of right now, the earliest you can start claiming Social Security benefits is age 62. However, by filing early you’ll sacrifice a portion of your benefits. If you were born in 1960 or later, the full retirement age (which is also the full Social Security benefits age) is 67. Your benefit will increase if you delay it and work until age 70.

To get started, The Sum runs you through these 5 tips to help you prepare starting right now.

#1 Prepare Early

Start your savings as early as possible, maintain a modest lifestyle and invest any additional income you accumulate over time.

#2 Save Strategically

Experts recommend investing at least 10% of your income (more if you can or if you need to catch up).

#3 Diversify Your Portfolio

Use a tax-savvy account to save like a traditional 401(k), where contributions are pre-tax, or Roth IRA, which allows for after-tax savings and tax-free withdrawals when certain conditions are met.

#4 Invest in Your Health

Spending on healthcare, from medications to copays, can be costly. Try to stay physically fit to keep your body in the best shape possible.

#5 Expect to Spend More

Inflation and prices will go up throughout your lifetime. So plan to save more than you think you’ll need.

Sources

• The New York Times: Seven Days to a Better Retirement
• Nationwide: Retirement advice from real retirees
• Truist: 5 key retirement planning tips from real retirees
• Ameriprise Financial: 7 top retirement tips — retirement advice for every age
• Forbes: Top 10 Retirement Tips For 2022
• Nerdwallet: 5 Steps to Retirement Planning in 2022: An Introduction & How-to Guide
• The New York Times Business: How to Win at Retirement Savings

READ MORE ABOUT THIS IN THE SUM

The Sum breaks down complex economic issues and how they impact your life in just a few minutes a day. Follow thesum.news on Instagram for the full story.

This story was originally published October 13, 2022 at 12:53 PM with the headline "5 tips to maximize your retirement savings."

The Sum

mahoningmatters

The Sum breaks down complex economic issues and how they impact your life in just a few minutes a day. Follow @thesum.news on Instagram for the full story.

HV

Haley Velasco

The Kansas City Star