4 Ways to Max Out Your Retirement Income
Will you be spending your retirement ticking items off your bucket list, or will you be living in a shack and eating Ramen noodles? The answer depends on how good you are at coming up with an adequate amount of retirement income. Americans aren't very good at saving, which is probably why 22% of us say our top financial regret is not saving for retirement earlier. But if you adopt these tips, you can maximize the profits on whatever retirement savings you do have.
Could you up a sum of money so large that you'd be able to live on it indefinitely after you retire? Probably not, but there's a hack you can use to make the money you save grow to a balance far higher than your total contributions. The secret is using a tax-advantaged retirement account such as a 401(k) or IRA and investing the money in the account in stocks and bonds.
Using a regular bank savings account to hold your retirement money is like running a marathon with a 50-pound weight on your back. 401(k)s and IRAs allow your money to grow tax-free, which means that you can keep your gains instead of handing a percentage over to the government. Plus, these accounts give you a tax break on either your contributions (for traditional 401(k)s and IRAs) or withdrawals (for Roth accounts).
Source: Fool.com
