The Importance Of Saving For The Future

It is important to save for the future

It is important to save for the future. Without the savings mindset, you could find yourself in the later years of life with all of your good working ability behind you and not enough in way of resources to live comfortably. You never know what direction your life or the economy or the lives of your children will take, so it is important to save all you can now during prime working years, so you can be ready for any of the possible challenges that lay ahead. To do so, you will want to be aware of a few key savings strategies that are sure to give you the upper hand in the times ahead. If you really want to make a difference in your life, then make sure that you are taking advantage of the following:

1. Roth IRA Plans

Roth IRA plans can be withdrawn tax free upon retirement. You can use them to make capital gains investments in the interim to grow your initial deposit at a rate of return of anywhere from 7.5 to 15 percent per year. When you are pulling in that kind of money every year, you are earning a much greater return on your investment than what is available through traditional social security, which only provides about a 1 percent rate of return. Those who rely strictly on social security for their retirement are typically the ones, who end up becoming wards of the state and putting all the burden on their loved ones. Don't be this person.

2. 401k matching plans

Prior to the economic downturn, these were far more common than they are today, but some corporations still offer a retirement matching program in which everything you contribute from your salary, in pre tax dollars, is matched to a certain percent by the company itself. If you want to build a significant nest egg in a hurry, then you have to take advantage of the opportunities that these types of savings plans allow. Without them, it could take you a much longer amount of time. Of course, you will still have to make smart investments, so make sure that you invest in funds or stocks that have a steady rate of return and not much in way of volatility.

3. Frugal spending

While a Roth IRA and 401k plan can add a lot to your financial life, the most important thing that you can do is exercise responsible spending patterns in all that you do. You cannot tell what the future will hold in terms of inflation and job creation. All that you can control is the here and now, so make sure that you make smart investments today for a better tomorrow.

by: Gen Wright

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