Whether you’re new to the workforce or you’re almost at retirement age, there’s always something you can do to grow your nest egg. Growing your nest egg is essential in this uncertain world. You may not know when you would need money. There can be so many situations that could require you to be financially stable.

For instance, if you start developing symptoms of dementia or Alzheimer’s, then you might need money to afford assisted living centres like Chelsea Senior Living (which can be found on the Internet by looking up keywords similar to senior assisted living NJ), where you can get extensive care. Or if your better half becomes ill, suddenly, you would need money to afford treatment for her. So, as it can be understood, saving money for retirement is imperative.

Some people also like to save money for their retirement, so that they can travel, chill and have a happy time with family after they have retired from work. Well, all it needs is early planning, whether you are employed somewhere or are an independent business owner. However, in case you are a government employee, you can look up for federal employees retirement system to know the perks you can avail of.

That said, here are a few ways to help you plan your retirement in an effective manner.

1. Start saving NOW

The sooner you start, the more interest you will gain from your savings. That is what you call the power of compound interest. Don’t worry about starting too early or that you’re already too late. There is never a better time to start saving for retirement than now. If you have extra cash from your income, use that towards your retirement fund. Once you retire, you could use these savings in case of an emergency or if you want to purchase one of those beautiful new homes in an adult community. The possibilities are endless!

2. Save a percentage of your income

How much you put towards your retirement depends on how much you’re earning and how long you plan to work. The minimum recommended amount is 15% of your paycheck but if you can save more than that, do it. Make it a habit to save and it will become second nature. It also forces you work harder and find other ways to earn money.

3. Automate your savings

If you find it hard to save money for retirement, consider automating it. Call your bank and have them automatically take out a specific amount from your checking account to go towards your retirement account. It takes your mind away from the pain parting with that money (even though you’re not really losing it) and makes you less likely to take it back since there is a fee for taking out money from your retirement fund.

4. Borrow only payday loans that you need

Payday loans are a great option if you don’t want to touch your retirement fund. If you do decide to get a payday loan, shop around for the best rates and only borrow what you actually need. This will help protect your retirement money while still having that extra backup to pay for emergency expenses.

5. Put your money on simple investments

When it comes to investing your money, simpler is better. Sure, stocks give you bigger returns but the risk is higher too. You’d have to spend a lot of time researching stocks and industries to make sure you are putting your money in the right place.

Instead, why not go for slow but sure investments like index funds. You’re not gonna see big returns everyday but you’re practically getting all the returns available since these funds buy every stock or bond in a specific market.

6. Match your employer’s maximum contribution

If your employer offers a match on your contributions, take advantage of it. This means that your employer contributes a certain amount to match what you’re putting into your 401(k). Of course, this all depends on their matching algorithm. The average scenario is that your employer contributes 50% for 6% of your salary. Some companies though are very generous and will match 100% but only to a certain percentage or amount.

So how does it work?

Let’s say you earn $60,000 per year use 3% of your salary to go towards your 401(k). That means you are putting 1,800 on your retirement fund per year. If your employer matches your contribution by 50%, this means that they will pay 50% of your retirement contribution ($900).

Of course, this amount can go higher depending on the percentage you are paying and what your employer is offering so the best way to really benefit from this is by paying the highest percentage available. It’s essentially free money that will grow for the years to come.

7. Choose the right IRA for you

If your employer does not offer retirement plans, you can set up your own I.R.A., Roth I.R.A. or solo 401(k) plan. Each type of account behaves differently but the biggest difference of the three is the tax you pay.

With a ROTH IRA, you pay taxes before putting it in the account but you don’t pay taxes anymore whenever you withdraw. For I.R.A.s, you can get a tax exemption if you contribute a certain limit. With 401(k)s however, you pay taxes once you withdraw the money during retirement.

There are also specific retirement accounts such as SEP IRA for self-employed individuals. Choose what’s best for you and be consistent with your contributions to avoid paying hefty fees.

Have other suggestions for saving money for retirement? Share your thoughts in the comments