For many of us the "long term" means retirement.

These are supposed to be the golden years where people enjoy traveling, spending time with their families, and leaving work behind.

Unfortunately for many people, this is not the case. People are working longer now-- more than they ever have-- and it is not because they enjoy their job or want to, it is because they can not afford to retire.

Preparing early on is the best way to ensure that a comfortable retirement is possible. 

Savings Methods:  

  • 401K.  Many of us have access to a 401(k) through work. Not many employers contribute; however, they do provide a method for employees to save a portion of their pay after 90 days of employment. 401(k) accounts are beneficial because they are a pre-tax savings vehicle, which helps reduce the amount the contributor pays in taxes. Start early, and start big. If you begin contributing a minimum of 10%, as soon as you can, you will get used to not having the money, which always makes it easier.  
  • Roth IRAs.  Roth IRAs are another popular option. These are post-tax savings vehicles, which means you pay taxes prior to the deposit, but then are able to withdraw the funds tax-free when you qualify. This is something which can be set up through your bank or credit union, and does not require employer involvement.  

Either of these options are excellent choices. It is up to you to determine which one fits your financial life the best.  

Start Early:

Time is compound interest's best friend. The sooner you start saving, the longer both the balance and the interest have to keep growing. Delaying participation by only five years can have enormous long-term repercussions and mean a difference of tens of thousands of dollars. Take advantage of these savings programs as soon as you can.  

Start if you haven't already... 

If you have not already started, it is never too late to start. Any amount of savings will help. Some of the 401(k) investment limits are raised for investors who are older. Take advantage while you can. Every little bit helps.  

Invest Intelligently:  

Speak with a financial planner either through your 401(k) provider, or through your local bank or credit union. How many of you know of people who lost a significant amount of money during the recent downturn? Could it have been avoided if they had not picked riskier investments as they neared retirement age? Possibly.  

Bottom Line:

  • Start early
  • Start big
  • Start tomorrow if you have not already
  • Use the resources at your disposal 

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Rob Taylor

Rob is a contributing writer for the Straight Talk on Debt blog. Rob has been in the business of helping people get out of debt for the past six years. He is a product manager with the CareOne team and focuses on making debt relief plans even better.