Is your retirement fund woefully underfunded? Maybe it’s nonexistent. Starting a retirement fund while you’re young is ideal, but it’s never too late to start. Being a homeowner gives you some extra leverage to saving for your later years. Here are ways to quickly boost your retirement fund if you are a homeowner in Sacramento.
401k and Roth IRA
You may already have a 401k set up with your employer, but are you taking full advantage of the employer match program if it’s available? You definitely want to put as much as you can in your 401k to maximize your employer’s match. Some employers match 50% of contributions up to a certain amount, and some may match 100% or make deposits even if you don’t! This method of saving also cuts paycheck tax costs, since the 401k funds are taken out of your check before taxes.
In addition to the 401k, you can have a Roth IRA account. Your money will be taxed now, but not later in retirement when it matters most. Make sure to max out your Roth IRA contributions to take advantage of this saving opportunity! Contributing the maximum allowed amount will quickly boost your retirement fund. If you are over 50, you are allowed to contribute a little more into your accounts, also referred to as “catch up” savings.
Create an Aggressive Debt Pay-Off Plan
Paying off outstanding debt is a great way to boost your retirement fund. Don’t make the mistake of only making the minimum payments on accounts. These payments are largely eaten up by interest, while your principal balances take many years to pay off. Making large lump payments to bring down your overall balance will save you thousands in the long run, and leave you more money to contribute to your retirement fund. Once you have your balances paid off, commit to paying off the entire balance every month. Not only will this save you money, but this will also improve your credit score!
Sell Your House
If you are a homeowner in Sacramento, the easiest and quickest way to boost your retirement fund is to sell your house! Take into consideration downsizing now to save for the future. You can also take advantage of the low-interest rates when you are looking for a loan for your new home.
After the windfall of a home sale, you can put thousands of dollars away to start earning interest now. Your retired self will thank you later — trust us! Look for a smaller property and take advantage of lower interest rates so you can contribute even more to your retirement funds. By selling and down scaling now, you may also save in some unexpected places, like the electric and water bill. You might be able to find a more energy-efficient home closer to your work and save time and gas money every day!