Most of us will understand the importance of saving for our retirement years. And the earlier you begin to start paying into your retirement fund, the better a retirement you will be able to enjoy. However, saving for your retirement and growing your wealth over time can often be easier said than done, with most of us dealing with mounting financial demands and expenses in our lives that can make regular saving and wealth-growing even more challenging. However, the good news is that there are several things that you can do no matter what point in life you are at, in order to make your money work harder for you towards your retirement savings. Here are some of the best options to consider when it comes to growing your retirement fund.
Open a Retirement Plan Account:
Opening an account that is dedicated to saving for your retirement is one of the first important steps to take. A Registered Retirement Savings plan is one of the best ways that you can do this. Any money that you pay into this plan will be exempt from tax until you withdraw and use it when you are retired, at which point you will be in a lower tax bracket. This can be an ideal way to stretch your retirement savings further throughout your life by paying less income tax and tax on your savings.
Make Wise Investments:
Starting an investment portfolio is one of the best ways to grow your wealth over time towards your retirement. Investing your money is easier than ever with a wide range of investment opportunities and ways to make your money grow. There are various investment options to make, with stocks being one of the most popular choices. Investing in stocks involves purchasing a share of ownership in a publicly-traded company, with many of the most well-known companies around the world available for you to purchase a share in. In addition, you may be interested in maximising your chance of large returns by investing in some of the most promising up-and-coming new publicly-traded companies on the market.
Get started by researching the best trading platforms available at Wealthsimple. Wealthsimple has a huge range of advice available on trading stocks, how to get started, how to choose the right stocks to invest in, and the best investment tools to use.
Reduce Debt:
Today, it’s hard to get through life without ending up in some kind of debt, especially if you are a property owner. With most people unable to buy their own home without a mortgage, this is definitely a debt that many of us can’t get away from owing. Personal loans, credit cards, and other types of debt are also becoming more and more commonplace as purchases become more expensive and people look for ways to spread the cost. However, while there are many valid reasons to borrow money, it’s worth being careful about taking out credit unless it’s absolutely necessary.
Being in debt can seriously hamper your ability to pay into a retirement savings fund and the cost of borrowing will add up over time due to interest rates. It is worth paying off as many debts as possible as a matter of priority before you start committing to building your retirement savings.
Create a Retirement Savings Budget:
Committing to seriously growing your retirement savings over time will involve putting aside a certain amount each month. To make sure that you are able to do this, it is key to come up with an amount for your retirement savings that you know you will be able to afford. Treat it like you would treat any other regular expense that you have like bills and repayments, and make sure that it is paid as a matter of priority when you receive your income rather than waiting to see how much you have left over at the end of the month. It is a wise idea to go through your income and outgoings to work out how much disposable income you have left over that you could comfortably put towards your retirement.
Reduce Your Monthly Expenses:
Cutting back on the amount of money that you pay for various expenses on a monthly basis is an ideal way to free up more cash that could go into your retirement fund instead. Even if you don’t think that there will be many opportunities for you to reduce the amount that you spend on expenses each month, you might be surprised after going through your account to see what you are paying for. Many of us will pay subscriptions and other monthly expenses automatically, even if we no longer need them. Whether it’s an entertainment service that you don’t use and are still paying for or insurance on an item that you no longer own that you forgot to cancel, even the smallest savings can quickly add up over time.
Shop Around for Future Products and Services:
Another way to reduce your monthly expenses to free up more cash to put towards your retirement fund is by shopping around for your future products and services like insurance, utilities, entertainment, and more. Many of these services are available on a contract basis for a year or two, and there is usually no benefit to sticking around with the same company after your contract has ended. In fact, with products like insurance, auto-renewing with the same company could often be more expensive compared to taking out a new policy elsewhere. As a result, you could make significant monthly savings by simply using comparison sites to find better deals when you are looking for a new service.
Generate Passive Income:
Another way to have more money coming in that you can put towards your retirement savings is to generate a passive income. A passive income is unlike earned income in that it comes in even when you are not working. There are several things that you can consider doing to generate passive income, such as renting out a spare room or parking space at your home, investing in rental property, writing and publishing a book, creating an online course, and more. Consider doing something that you can invest time and effort into now in order to create a stream of recurring income in the future – even when you are doing nothing.
Get a Side Hustle:
If your financial situation is such that no amount of extra savings or reducing your expenses is going to make a huge difference to your retirement savings, you might want to consider getting a side hustle. Today, there are various different options for things that you can do aside from your regular income from your full-time job. You might want to consider making money from a hobby like crafting, writing or cooking, upcycling and selling old furniture or offering an online service like graphic design or web design. Alternatively, you might want to consider finding online freelance work for companies that are always looking for services like virtual assistance, web design, graphic design, branding, social media management and content creation. You can easily use websites like Fiverr to connect with potential clients who might be looking for the online services that you could offer them in order to make some additional money in your spare time. Or you could find a local side hustle such as dog walking, cleaning, ironing, and more – it’s all down to you and how you would prefer to earn your extra cash.
Sell Your Old Stuff:
You might be surprised at how much some of the unwanted things that you have at home could be worth and selling them could generate a decent-sized lump sum to put towards your retirement account. Old furniture, electronic items, and even general household items might fetch more than you think they would online, so it’s definitely worth listing your items for sale on Facebook Marketplace, eBay and other selling sites to see how much you might be able to make. If you are a creative person, it might be worth investing a little bit of money and effort into touching up and improving older items that could be worth more if they were in better condition. Old wooden furniture, for example, will often fetch a much higher price if you make some simple improvements to it like a fresh coat of varnish and new handles.
Saving for your retirement can often be easier said than done, with other pertinent expenses to consider throughout our lifetimes. However, the good news is that there are several things that you can do to make your money and time work harder for you when it comes to growing your retirement fund and making sure that you have a nice nest egg set aside for later in life. From investing some of your earnings to finding a side hustle to increase your income, the earlier you get started with committing to saving, the more enjoyable your retirement is likely to be.
