3 Simple Ways To Enhance Your Retirement Savings

You have been running your small business for a few years, and it is becoming more and more profitable.  You are excited about your recent success, and you want to develop ways to expand on this success.  However, it is important to think about your financial health as well.  You want to ensure that you are well off once you are ready to sell or leave your business when you hit retirement age.  Luckily, there are a few simple tips to follow when it comes to retirement planning.

The Earlier, The Better

When it comes to saving for retirement, you need to start as early as possible so that the compound interest can accumulate.  Even if you save a small amount every month, it is better than waiting until you are in your mid-30’s to 40’s. It is better in the end if you invest a smaller amount across a long time period than investing a larger amount across a short time period.  You want as much time as possible for compound interest to generate and accumulate.

Contribute To Your 401(k)

Many traditional 401(k) plans that companies offer to allow people to contribute pre-tax money to their retirement.  This means that your take-home pay will not be as affected once taxes are taken out, and you can invest more into your 401(k).  Many employers will also match what you contribute to your 401(k) plan. Remember to start contributing to your retirement plan as early as possible.

Open An IRA

It is important that you open an individual retirement account (IRA) for yourself so that you have money to look forward to once you retire.  When it comes to opening an IRA, you have two options: a Traditional and Roth IRA. You can only contribute to a Traditional IRA if you are younger than 70 ½.  Your contributions can be tax deductible depending on you and your spouse’s income. The main difference between Traditional and Roth IRA’s is when you can withdraw money.  If you have a Traditional IRA, you have to withdraw money by 70 ½ whether you need it or not. There are no age restrictions when it comes to withdrawing money from a Roth IRA account.

PL Consulting Can Help You Plan Your Budget!

PL Consulting offers a diverse range of bookkeeping and other financial services. Each of our services is customized to fit the needs of our client and his or her business plan. Our team can help you with each step of your business from organization, to budget, to financial maintenance.  We are located in Pikesville at 119 Old Court Rd Baltimore, MD 21208. Contact us at 410.764.3731 or info@plcfo.com so that we can assist you with your bookkeeping needs.