Senior man relaxing on a hammock
January 2, 2016
By Jack Ryder

4 Retirement Resolutions for 2016

Simple. Thrifty. Living.

It’s a new year, which means it is time to start thinking of ways to improve yourself. If you have not yet started to make plans for your retirement years, then perhaps your New Year’s resolution should focus on funding your retirement. Saving for retirement will make it easy for you to enjoy your twilight years instead of worrying about money.

Knowing how to save for retirement or the best plan to get the most from your investment can be tricky, but we’ve come up with some tips to help you get started:

This is the simplest way for you to get the ball rolling. By making a direct deposit to your 401(k), IRA or other individual account, you will automatically be contributing to your retirement without having to lift a finger. And since it’s automatic, you won’t get into the habit of saying “Oh, I can’t afford it this month, I’ll do it next month,” and keep postponing contributing to your retirement. If you don’t have a 401(k) through your job, sites like E*TRADE will still allow you to make direct deposits into a personal 401(k) or IRA.

You need to be looking at ways of using less and saving more when it comes to your investment options. While it may be difficult to manipulate the returns you get on investments unless you are an investment expert, you can control the fees and other extra costs you pay when investing. Take a look at your current investment broker or site and compare their fees and costs with other popular brokers and sites. For example, OptionsHouse has the lowest trading fee of most of the top online sites, charging only $3.95 for trades, as compared to $8-$9 on other sites.

With a Roth 401(k) or Roth IRA, you will be allowed to prepay income taxes on the savings made towards retirement. For the person who is young or one who falls in the low tax categories, these can be highly advantageous plans. Usually, you can make withdrawals tax free once you’ve been contributing for a while. Roth IRAs are lauded because they do not come with a huge tax cost in retirement and you do not have to make annual distributions.

When you have assistance from your employer, you can basically add free money to your retirement account. Ask your employer if they do a 401(k) match, and if they don’t, ask them if it would be possible to start. Many companies like to add this as a perk to keep employees happy.

Issues of taxation are crucial to those who are keen on making savings or investment for their retirement years. Given the range of retirement account options available, you need to make a choice of the one which will cost you least but offer the most returns. Here’s a good article on the differences between a 401(k) and an IRA.

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