Are you ready to take your retirement savings to the next level?
Depending on your current situation, this question may incite a range of different thoughts and emotions. For instance, you may be thinking, “I’m already contributing as much as I possibly can to my 401(k) plan — and now you’re suggesting that I contribute more?” Maybe you got a late start to saving and worry that you may have to work longer than expected in order to catch up. Or perhaps the sheer thought of retirement sparks feelings of anxiety and uncertainty — so much that you’re inclined to push the thought as far back into your mind as possible.
If you fall into any of these camps, repeat after me: breathe. Next, recognize that you’re not alone: according to a recent survey by Schwab Retirement Services, saving for retirement is the number-one financial stress among Americans today, even more than job security, paying off credit card debt and keeping pace with monthly expenses.1
So before you grab your 401(k) plan statement and frantically run some back-of-the-envelope numbers (or resort to breathing into a paper bag), here’s some food for thought: retirement planning is an ongoing process, a path that constantly evolves as your life and priorities change. At the same time, it’s not a set-it-and-forget-it type of situation, either. Even if you’re only making small steps forward, taking time to plan and prepare today will save you a big headache when your retirement date actually arrives. And it will arrive, so long as you take the proper measures in advance.
More good news: you’re in control of your own retirement outlook.
If you’re already contributing to your plan and have gradually started to boost your deferrals over time, you’re off to an amazing start! You also have the option of getting more strategic with your savings, which doesn’t necessarily translate into more money out of your pocket every two weeks — in fact, it can actually save you money.
Up Your Strategy
Many employers have started to give their participants the option of choosing between two types of 401(k) plans: a Roth and a traditional. It may sound complex, but the primary difference between the two structures really comes down to everybody’s favorite topic: taxes.
So how do taxes factor into the Roth versus traditional debate? And most importantly, how can you decide which option is right for you and your retirement goals? Discover the differences in the second segment of “Big Future, Little Steps,” an educational series we’ve designed to help savers like you secure the retirement they’ve always wanted.
Want to Keep Learning?
Check out the first segment of our “Big Future, Little Steps” series, which explores the true impact that waiting to save can have on your long-term goals. Watch Part I
