Retirement daunts upon you sooner than you think. However, with different income levels on top of consumer debt, saving for retirement make it even more difficult. How hard is it to save for retirement with a smaller salary?
Save for Retirement With a Smaller Salary
It All Begins with Planning
Preparing for retirement takes planning, whether you make $30,000 a year or $150,000. Your plan to save for retirement needs commitment and discipline. The key is to remember the goal of retirement. You want to maintain your current lifestyle after you leave the working world. In the process, avoid accumulating too much debt to prioritize on retirement. Therefore, the key to saving a sizable nest egg, no matter your income, is to start setting aside dollars at as early an age as possible.
Work On Eliminating Debt
Focus on eliminating credit card debt with high-interest first. Your retirement savings will come on naturally afterward. Debt is going to eat away every bit of savings that you have. Your interest rates on credit cards are going to be greater than any interest you get from your savings.
Don’t Forget Your Tax Credits
When you are trying to save for retirement with a smaller salary you must take advantage of the Savers Credit available from the IRS. This credit, which is worth up to $1,000 for individuals or $2,000 for couples, can be claimed by low-income earners who contribute to IRAs, 401(k) plans or other workplace retirement accounts.
Prioritize Your Savings
Low-earners have to be especially diligent about saving for retirement. This means forgoing such luxuries as those take-out cups of coffee in the morning.
Your retirement is your priority. Work towards it step-by-step and look forward to a comfortable retirement.