Just because you’ve gotten a late start on saving for retirement doesn’t mean you can’t build a healthy nest egg. Here are some helpful tips to put you on the path to a successful retirement.
Find Ways To Cut Costs
Scrutinizing your monthly expenses is key to finding areas where you are overspending. You might have to make some tough choices and focus on essentials while cutting out luxuries. From dining out to subscriptions, any amount you can trim from the bottom line is money that can be put toward paying down debt and growing your nest egg.
Eliminate High-Interest Debt
The interest rates on retail credit cards are at an all-time high, around 20%. As long as you carry a balance, that interest keeps compounding. Making minimum payments could lead to an item ultimately costing triple what you initially paid for it. If you knew that when you were checking out, would still have made that purchase? Transferring balances to a credit card that offers an introductory no-interest period can help you make a dent in your debt. Also, check interest rates on personal loans, if the rate is substantially lower, use the cash to pay off those high-interest cards.
Contribute To Your TSP
While the best time to have started investing in the TSP was the day you were hired, the second best time is now. The first 3% of your contribution is matched dollar for dollar by your agency, while the next 2% enjoys a 50% match. This is free money you can take advantage of to build your nest egg. Plus, you have the option of choosing a risk-tolerant strategy to try and maximize growth.
“While the best time to have started investing in the TSP was the day you were hired, the second best time is now.”
Live Below Your Means
It’s much better to be rich than to look rich. Leasing a new car every few years, dining out at new trendy restaurants, and wearing designer brands take a large chunk out of your budget. Keeping your spending low allows you to invest more in your retirement account and benefit from compound growth.
Speak With A Professional
Financial advisors aren’t just for the wealthy. Investing can be a tricky world to navigate, and it’s beneficial to have someone with knowledge and expertise. Retirement planning for federal employees is unique, and an FRC® trained advisor understands how to coordinate your FERS pension, TSP withdrawals, and Social Security benefit to ensure you make the most of your retirement.
