Best Moves You Can Make For Retirement

shutterstock_135636785Retirement is a time when you should be comfortably enjoying life. But all that comes with preparation. People who enjoy retirement life are those who prepared thoroughly for it. The right decisions you make early can yield positive results in your retirement. Here are some of the best moves you can make for your retirement.

Take advantage of employer matching contributions on your 401k.

When building up your 401k, you usually get some help from your employer in the form of matching contributions. Depending on whom you work for, you may get as much as 50 percent of your monthly contributions in employer matches. You can consider it as free money that goes into your 401k account for your retirement. Make sure that you take full advantage of your employer’s matching contributions.

Make use of your IRA’s maximum contribution limits.

Your IRA account usually indicates the maximum annual contributions that you can put in. the amount depends on your age. By the time you reach 55, the contribution limits increase to help would-be retirees to contribute more on their IRA account.

But until then the contribution limits usually stay as they are. People who do not take advantage by making the maximum allowable contribution annually may be losing out on an opportunity. The contribution limits that you do not use do not carry over for the next year. Once you do not use it this year, it is gone.

Avoid cashing out your retirement plan when changing jobs.

Many people make the mistake of cashing out their previous retirement plans when they change jobs. They find it more convenient. But it also reduces the benefits that you get. Cashing it out will result in not getting the full benefits of the retirement plan. You only get to cash out a portion of it. Some go to taxes while others go to the penalties and charges as a result of early withdrawal of the account. A better option is for you to roll it over to the retirement plan on your new job. That way, you still allow your previous retirement plan to work for you and enjoy the tax-deferred status of your contributions.

 

Posted by Ardent Editor on Jul 7 2014 in Retirement 101 Tags: , , ,

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