After years of service when you’ll finally retire, your main concern would be to keep the flow of money coming. Saving is most helpful for that. The more money you’ll save now, the better off you’ll be after retirement. If you are a fire-fighter or a police officer, you’ll retire with a handsome amount of money.

But now everyone can expect a lump sum amount at the time of retirement and so you’ll have to start saving from now. In this article, we’ll give you some tips on retirement savings.

Save from annual income

This is the easiest and simplest way to save money for retirement. Try to save 10% to 15% of your annual income. Make a separate account for retirement saving and funnel the annual saving into that account. It’s just like planting seeds; after 15 or 20 years, the seeds will grow into a giant tree. If you start saving 10 or 15% of your annual income from now, at the time retirement, there will be a sizable amount in your account.

Credit card debt payoff

We all use credit cards to purchase something online. It’s easy and convenient. On the flip side however, credit cards with high interest rate results in debt and debts keep accruing. You should pay off the debt now because if you don’t, it will bug you after retirement. Another thing you can do is to use low-interest-rate credit card.

Take advantage of 401(K) plan

Most employers offer 401 (K) plan to employees. The plan lets you make salary deferral. You can save a certain amount of your paycheck before taxes are taken out. Once the money you want to save is withdrawn from your account, taxes will be assessed. There are many plans under 401(K). The plans are mostly mutual funds consist of stocks, bonds and money market investments. You can take help from a professional consultant to decide which plan would suit you best.

Meet your employer’s match

An employer offers a match on an employee’s contribution. Make sure you meet that match. For example, if your employer matches 50% of your contribution to 5% of your annual salary and if your salary is $100000/year, your employer will generate $2500 for you other than $5000 that you will contribute. So check the matching contribution offered by your employer.

Open IRA account

IRA is the acronym for individual retirement account. There are many IRA plans and they come with plenty of advantages. For example, Roth IRA plans offer tax free money to the saver. Also, if you withdraw Roth IRA savings, you won’t have to pay penalty. Yet another advantage of Roth IRA is that you could keep contributing after the age of 70 ½, unlike the traditional IRA plan. So study about those plans and choose one that would best serve your interest.

A recent survey has shown more than 30% workers have less than $1000 retirement savings. You shouldn’t be among those 30% people and start saving for your retirement from now.