NEW YORK, August 24, 2023 (Newswire.com) - An important thing to understand about unlocking your retirement potential through the art of saving and investing is that the best time to start is right now. The earlier you begin saving and investing for retirement, the more money you'll have when you get there. Yes, in part because the sooner you begin, the more you'll save. However, the principle of compound interest magnifies this concept to a greater degree. With that said, though, it is never too late. These experienced insights from Yieldstreet may help, regardless of where you are on your career path.
1. Establish Your Goal
Many counselors advise saving and investing 15% of your income annually. Of course, the exact amount you save will depend upon the goal you set for yourself. Using a retirement calculator, you can determine how much you need to put away annually to reach a certain monetary goal in a given number of years.
2. Harness the Power of Compound Interest
Consider a scenario in which two people invest a total $5,000 annually, earning a six percent return. Further, let's assume they both retire at age 67. However, one person begins investing at age 22, while the other starts at 32. Leveraging compound interest, the 22-year-old will have some $500,000 more than the 32-year-old at retirement, because in addition to the 10 years of additional savings, they'll earn interest on their interest over a 10-year longer period.
3. Leverage Employer Matching Contributions
Employers often provide matching funds of up to 5% of your contributions to your retirement fund. Whatever the case, put away at least the amount needed to get their maximum contribution. That is free money they will give you, just because you're saving money for your future. Take advantage of it.
4. Save—Regardless of the Type of Investment Account You Choose
In some cases, an employer's 401(k) plan will have pre-selected investments, ranked by degrees of aggressiveness. In that instance, you'll have the option of choosing the level of risk to which you're comfortable being exposed.
Other choices include Individual Retirement Accounts (IRAs), which you can establish and guide on your own. Those dollars typically aren't taxed until you make account withdrawals. However, the Roth IRA taxes the money when it goes in so it can be withdrawn tax-free. This can be advantageous for younger people, as they'll get future money based upon current taxes.
These are but two of the investment options you'll have. Others include annuities, mutual funds, stocks, bonds, exchange traded funds, dividend reinvestment plans and more. Here, it is a good idea to work with an investment professional to help you establish, balance, and manage your portfolio. Many, such as the Yieldstreet Loyalty Program, offer a number of benefits such as special investment opportunities, knowledgeable Private Client Group and Investor Relations associates, portfolio reviews and more.
These tips could help you maximize your retirement potential.Contact Information:
Original Source: Unlocking Your Retirement Potential: The Art of Saving and Investing