You know what’s better than investing in random consumer goods? Investing in yourself and your future. The best way you can do that, of course, is by saving for retirement. However, it seems like many younger people feel a degree of stress when they think about saving for retirement.
While this is to be expected, it’s not something to get hung up on. Today, we’re looking at some of the top ways you can save for retirement, stress-free! Let’s get into saving for the future.
When it comes to retirement, there are three main types of investments you can make. These are stocks, bonds, and cash funds. Stocks are pretty common: they’re like buying a stake in a company. You stand to gain when the company does, or lose when they do. These are high-risk, high-reward investments.
Bonds are a bit safer. They’re sort of like loans you offer up to organizations. Bonds have set dates they need to be paid back by, so, generally, these are a safe way to grow your money. Cash funds, finally, are the least risky investments out there. However, they’re also the lowest payout. In short, they’re safe.
This might all sound stressful. However, it shouldn’t! There are easy ways to think about these types of investments that can help you keep things simple. If you’re younger, you should invest more of your money in stocks. Since you stand to gain more, and will be able to cash out over time, it’s better to invest in stocks when you’re younger.
As you get older and cash out of your stocks, you should transition to more bonds. Then, as you approach retirement age, you should invest what you’ve made from bonds into cash funds. This way, your money smoothly slides from high-risk, high-reward investments to dependable growth models.
If your employer has set up a matching system for your retirement fund, take it seriously. A match for your retirement is free money. No, seriously: it’s free money. They give you money for saving money for yourself. That’s the very definition of a win-win! Make sure you set your retirement savings to max out any employer match.
If, for example, your employer matches up to five percent of your paycheck in savings, put five percent of your paycheck into savings and not a cent less. That money can grow exponentially over time, so you’re doing yourself a disservice if you don’t claim it.