Making the decision to save for retirement is an important step to start on the path to a secure financial future. Most people can usually select from several tax-advantaged options to save for retirement, sometimes at the same time. Here’s a list of ways you can save to help you make the most of your options.
You know that it’s important to save for retirement, and may already be setting aside some money in an individual retirement account (IRA) or the Thrift Savings Plan (TSP). But do you know how much you should be saving to cover your expenses in retirement? Take these steps to figure it out.
Saving for retirement can get complicated for spouses of servicemembers who move frequently. But even if you switch jobs with each move, do freelance work on the side or take time off from working, you can still make the most of tax-advantaged retirement savings plans.
Servicemembers have access to one of the lowest-cost ways to save for retirement. The Thrift Savings Plan (TSP), which is like a 401(k) for members of the military and federal employees, makes it easy to invest automatically from your pay. It also gives you a choice of five index funds and target-date funds, and only charges about .025 percent for fees. The money invested lowers your taxable income now and grows tax-deferred until you withdraw it in retirement.
The GI Bill is a valuable benefit that has helped veterans pay for college since World War II. A new version of the GI Bill, introduced in 2009, expands the benefits for people who have served in the military since September 11, 2001. Eligible servicemembers can receive money for tuition, housing and books to attend college themselves. Some can even transfer their benefits to their spouse and children. Here’s how to make the most of the GI Bill and start using the benefits.
Investing in a 529 college-savings plan is a great way to save for college. The money grows tax-deferred in funds you select within the account, and then it can be used tax-free for tuition and other college expenses. You can usually invest in any state’s 529 plan, no matter where you live, and the money can be used at colleges throughout the country—even internationally.