No matter your age, getting ready for retirement is a wise move. You will retire at some point, even if that seems far away from now. Taking a few steps to prepare will help you increase your account balance
Reduce Your Fixed Expenses
One of the best ways to save more for retirement is to reduce fixed expenses. If you still have student loans, you might consider refinancing them to reduce your expenses. This can help save on interest. But if you don’t have good credit, the process isn’t that easy because of the credit check before you can be approved. The good news is that even if you do not qualify for this option by yourself, you do have other options. You might be able to use a federal repayment program or get a cosigner with better credit. If you want to know more, you can look at a guide with more information on how the process works.
Evaluate Different Locations for Retirement
One of the things to keep in mind when saving for retirement is the physical location you plan to be retired in. Several states in the US, including Texas, New Hampshire, and Florida, do not have state income taxes, making them an appealing retirement location for many. Before you decide to move, however, take some time to evaluate the taxes your potential new home state has. Even though earned income is not taxed in New Hampshire, you will likely face taxes on income from interest and dividends.
Consider Working Part-Time in Retirement
You don’t have to sit around doing nothing as soon as you quit your day job to retire. Even if you just have a small side hustle, earning some self-employment income can help you pay for expenses during retirement. Since your overall income will likely be lower in retirement, your self-employment income will likely be taxed at a lower rate. However, that doesn’t mean you can't get a side hustle now as well. Even a little extra income can help you contribute to your 401(k) plan. You can often contribute even more if you are age 50 or older to catch up on what you need to save.
Take Advantage of an HSA Account
Healthcare costs are increasing exponentially, and high deductible health care plans are becoming more popular because of their lower premiums. If you have this type of health care plan, you likely have a health savings account tied to it, which your employer may contribute to. This account can help you with more than just paying for medical expenses. It can also be an excellent tool for planning for retirement.
It can help you pay for your healthcare expenses during retirement as well. Your contributions to the account are usually tax-deductible, and if you don’t use the expenses for your medical expenses, you will be able to let them keep increasing over time. When you reach a certain age, you may be able to use the funds for more than just medical expenses, but make sure you research the regulations in your state.