Contribute 1% More Each Year To Boost Your Retirement Savings

Contribute 1% More Each Year to Boost Your Retirement Savings

If it's relatively early in your career, planning for retirement may not seem important. You have bills to pay after all. If you're having trouble starting, work on contributing just 1% more each year.

Photo by American Advisors Group

Waiting until later in your life to save is one of the biggest money mistakes you can make. Although it seems like you can't afford it right now, you'll be in worse shape if you don't start somewhere.

Good Financial Cents share a bunch of financial tips for millennials. Starting this year, try saving just 1% more towards your retirement. Increase that contribution by 1% each year -- so your first year is 1%, the second year 2%, and so on. (That's on top of what you'll be getting in basic superannuation, which is helpful but not scheduled to rise any time soon.)

If you keep this strategy going, you'll eventually max out your ability to contribute to your retirement. By then, saving will be a habit for you. Hit the link for other financial tips.

29 Actionable Financial Tips That Millennials Need to Take Right Now [Good Financial Cents]


Comments

    Given that this article references a US site with different laws, might as well add something more Australian:

    Contributing an extra 1% can be done via your employer, and depending on your income, won't necessarily result in a 1% decrease in your income. For example, if you're earning $50,000 pa then you're likely paying 34% tax on some of your income. When you sacrifice 1% to super, you save 0.34% of that in tax, so you're only sacrificing 0.64%. Put that into context, sacrificing $1,000 will result in losing $640 from your paycheck. You will end up paying tax on your contributions, however that is paid by your superannuation fund.

    With the government in Australia raising the preservation age (again) for accessing super and a LOT of speculation on a plan for the government to enforce a system where bulk withdrawals cannot be made (even AFTER retirement age) and instead forces you to live on a weekly / fortnightly / monthly "salary" paid out from your super (with any residual amount left over when you die being "returned" to the government...)... I'm sceptical about the benefits of additional contributions to Super in Australia...

    Seems better to invest in stocks / property / bonds...

      Self managed super, with property. Working in the industry all the guys seem to think this is the way to go.

        Yeah, from what I've been hearing it's the way to go... obviously takes a bit more effort etc though...

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