Nothing to Invest? Ideas To Help You Find Money For Your Retirement Savings

One of the biggest problem for a lot of people why they don’t save for retirement is that they do not have any money.

Most of us have to attend to other expenses first and we tend to neglect the need to save for retirement. We tend to focus on what we’re doing for the present  more than what’s going to happen in our future.

However, this could be a very bad move as not having a retirement plan could mean that we might end up to retire in poverty. In addition, you may end up a little longer just to support yourself since your Medicare and social security benefits will just not cut it. It is really easy to make excuses on why we won’t save for our retirement.

Nevertheless, saving for retirement can easily be accomplished by following  these simple tips, being disciplined, and learning to pay a little price. Please keep in mind that these tips works not only for your retirement goals but also for any of your other  savings goal such as saving for an emergency fund, college education fund for your kids, and down payment for your house.

Below are some of the tips to follow to add more money to your retirement plans.

1. Cut-back on unncessary expenses

If you want to achieve your retirement goals, then you have to pay some price. Everyone of us have areas where we can cut corners. Below are just some of those:

• Brown bagging instead of eating out at lunch. Okay there are still cost associated with brown bagging but at least it is much cheaper than eating out at lunch. Let’s say your lunch cost is $14 and your brownbag cost only $4 then your potential savings – $10 per day or $200 per month
• Cutting back on restaurant dinner– if you do it three times a week, perhaps you can cut back to once a week. Or if you do it once a week, do it every two weeks. Potential Savings – $50 per month
• Cutting back on entertainment – if you watch movies in the theatres every week, perhaps you can cut back on some of those. There are alternatives such as waiting for it to come out on the DVD and rent it. Potential savings – $50 per month. Or if you watch a lot of sports games live every month, you can probably cut those to a minimum and watch the games on TV  instead.
• Consolidating Your Debt – if you have a lot of equity in your home and you have a lot of debt, you can take advantage of debt consolidation. This can lower your expenses. Let’s say your monthly payment with credit cards, personal loans and car loans amount to $1,000 per month. If you consolidate them using your home equity, you can probably cut it down to just $400 per month with a lesser interest rate. In addition, interest payments may be tax deductible as oppose to the interest payment made on non-home related debts. You see, you have just freed up $600 per month on this.
• Shopping around on your  insurance – Insurance is probably the second biggest expense besides our home. We pay auto insurance, home insurance, health insurance, life insurance or even disability insurance. You can cut back on insurance just by shopping around. Perhaps you have your auto and home insurance from different insurance companies. If you buy them from the same company, you can potentially save 20-30% per year.

2. Re-adjusting Your W-4  Withholding

Perhaps you are getting a big refund every tax year. Why not re-adjust your W4 from work so you can get your money early instead of waiting until the end of the tax year. The net effect would be the same but if you are counting on a matching contribution from your employer, you will be better off getting that money now instead of later.

You can live just for the present, but you cannot overdo it as well.

3. Contribute to tax deductible plans

You should always try to contribute on tax deductible plans. If you make $5,000 per month and you are in a 20%, bracket, your tax (for simplicity, lets exlude all the deductions) would be $1,000 and your net income is $4,000. However, if you contribute to a tax-deductible plan, your contribution of $500 per month would lessen your taxable income to just $4,500 and your tax would then be just $900. In this scenario, putting money in your retirement netted you a $100 extra money to invest.

4. Take advantage of the matching contribution from work

If you make $5,000 per month and you contribute 4% on it resulting in a $200 per month contribution. Now, if your employer would match it dollar for dollar for up to 4% of your salary, then that’s an extra $200 per month on your retirement. Your retirement just made 100% return on the first years

5. Utilize saver’s credit if you qualify

Low income people are at a disadvantage but have no fear, the saver’s credit is here. You would up to 50% of your retirement savings back.

6. Invest your raise to your retirement

Perhaps you get an annual raise, why not put it in your retirement so you can reach your goals faster. You are already accustomed to your current standard of living so investing your raise towards your retirement won’t have that much impact on your current budget.

7. Find supplement income

If you have cut everything and there still not enough for retirement. Consider finding an part-time job or business venture.

8. Invest your tax refund towards your retirement

Most of us receives tax refunds when we file our tax return. If you have a large refund, you can use the proceeds to fund your retirement as well. If you have qualifying kids and are eligible for claiming the earned income credit, child tax credit and making work pay credit, more than like you will have a huge refund when you file even if you do not owe any taxes. Take this opportunity to invest a portion if not all of the refunds towards your retirement plan