We have simplified making the most of your retirement savings with 3 easy steps.
It's never too late to start saving for retirement, and every step you make today pays off with a more secure future. But how to get started if you feel overwhelmed? Try making it painless so you don't even have to think about it!
Consider setting up an automatic transfer of money each month. Automating savings makes it easy to "pay yourself first," and what you don't see, you don't miss (or spend!). Set up an automatic transfer from your Citizens Bank account to your 401K or IRA. Most experts recommend saving 10% of your pre-tax income, but even if it's only $50, start small, be consistent, and keep going.
Get Free Money with Your 401K Match
If your employer offers a 401K match, use it! This means your boss will match every dollar you contribute to your 401K, usually up to 5% of your total salary. For example, if you make $100,000 and contribute 5% each year, or $5,000, your employer will contribute $5,000 as well, doubling your retirement savings.
If you have this benefit, it makes sense to max out contributions here before contributing to other retirement savings accounts.
Open an IRA
Whether or not your employer offers retirement savings benefits, you can take control of your financial future by opening an Individual Retirement Account (IRA). An IRA is an easy way to set aside funds for retirement today with a "tax-friendly" account. An IRA allows individuals to save with tax-free growth or on a tax-deferred basis.
A traditional IRA allows you to set aside retirement funds that are tax-deferred, meaning your money grows tax-free until you begin taking withdrawals. Traditional IRA contributions may also be tax-deductible, which can lower your income tax.
A Roth IRA lets you pay taxes on the funds you contribute now, without having to pay taxes on future growth and withdrawals. They aren't tax-deductible and you do have to pay taxes upfront, but that could represent significant savings when your investment grows and you later wish to withdraw funds, as long as you wait at least 5 years to withdraw them.
Citizens Bank's Individual Retirement Accounts not only help you save for retirement, they help you keep your treasure close. We offer both traditional and Roth IRAs to help you achieve your financial goals.