Maximize Your Retirment Savings with Year-End IRA Contributions

Did you know that you can still contribute to your Individual Retirement Account (IRA) until April 15, 2025 for the current (2024) tax year? That means you sitll have about six months to stash away more for your retirement!

Planning today and investing in your future can pay big dividends down the road. According to the Federal Reserve's latest "Report on the Economic Well-Being of U.S. Households in 2023," most Americans (66%) don't think their retirement savings is on track to reach their goals. Among current retirees, those with income from employment, pensions, or investments were doing substantially better than those who relied solely on Social Security or other public income sources, according to the report.

Here are a few tips to help you, and your loved ones, plan for a stronger future:

1. Starting sooner is Better

If you have a child or grandchild with a part-time or full-time job, encourage them to find out if their employer offers a 401(k) matching program or other retirement account. They may be surprised to learn they can benefit from their employer matching their own contributions and begin a life-long habit of saving. Even if an employer does not offer matching, it's never too early to open an IRA at a local financial institution to get started. The impact of compound interest over the years may surprise you! The earlier the better!

2. Continued Learning is Always Smart

While how much you'll need to save for retirement varies, you can get a better idea and start mapping out a plan of action using the free resources your local financial institution offers. For example, interactive retirement calculators can help you compare IRA options and determine how long retirement savings will last. The Social Security Administration also offers benefit estimates on its official website, www.ssa.gov.

3. More than One Goal? Prioritization is Key

If you have children, you may need to focus on multiple long-term goals at once to ensure you're saving enough for your own golden years while helping your children with college costs or other expenses. It can be a balancing act, so it's important that you prioritize must-haves and weigh your options to reduce other expenses.

4. Don't Forget Professionals Are Here to Help!

Abound offers financial planning resources, including a no-cost consultation with a licensed investment professional, to help you balance your goals and create a plan. A trusted financial partner can help you understand the different investment options available to you, including both federally insured savings accounts and stock or bond market-based investments*, and develop a plan that can help you reach your retirement and other long-term goals.

Saving for the future may seem daunting, but taking the first step now can make a huge difference down the road. You may be surprised by how quickly even small changes in your spending habits can add up. This fall is a great time to start planning for a more comfortable retirement and building a secure financial future.

Jake Darabos, CPA

Chief Finance and Administration Officer