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There are many ways to save for retirement, but the most important thing to remember is it’s never too early or late to start. Even if you only have a few dollars a month to put aside, getting into the habit of saving gives you a better chance of succeeding at it than not saving at all. There are a few savings vehicles to choose from when it comes to planning for retirement.

Contribute to your employer's retirement plan

If your employer offers a 401(k) or 457 plan, it’s easy to make contributions directly from your paycheck, before you even get it. Many employers will also match employee contributions, so by not participating you could be turning down free money. If you have a retirement plan with your employer, work with a financial advisor to make smart decisions with your investments considering your age, risk tolerance and income. Your human resoources department can help you enroll, but isn’t in a position to advise you on the best ways to invest your funds. 

Open an IRA

Another great choice for retirement savings is an Individual Retirement Account (IRA). Both Traditional and Roth IRAs are funded with after-tax dollars. With a Traditional IRA, contributions may be tax-deductible. You’re only taxed on the deductible contributions you’ve made and earnings you’ve received over time when you make withdrawals. A Roth IRA allows you tax-free withdrawals during retirement if you meet certain IRS rules.

Simplified Employee Pension (SEP) IRA is a unique option that may be available to a spouse who is self-employed or works for a small business, for instance. With a SEP IRA, the employer or business owner makes tax-deductible contributions to the account; employees do not make direct contributions. A SEP IRA follows the same investment, distribution and rollover rules as Traditional IRAs.

Consider lesser known retirement savings options

No matter whether you choose a specialized retirement account or another method of saving, like a Share Term Certificate ladder, it’s important to start saving whenever and however much you can. 

For advice on setting retirement savings goals, contact your Credit Union for no-cost Financial Counseling.

The advice provided is for informational purposes only. Contact a financial advisor for additional guidance. 

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