Saving for retirement can seem like a daunting task. It’s hard enough to put aside emergency savings without having to worry about the money you’re going to need when you retire.
Investing will help your savings grow beyond your own ability to contribute funds. Investments that appreciate in value, pay dividends, or generate interest allow you to start growing your savings without having to work for every penny.
If you don’t have any investments yet, these are the steps that can help you get started.
1 Start by Finding Savings
One of the first rules of investing is that you should never invest money that you can’t afford to lose. That means using extra savings that you don’t need in the short term.
One way you can find extra savings to start your investments is by selling valuables that you no longer want or need. A great place to start is looking for precious metals in your home, including old jewellery, coin collections, or silverware. People often inherit gold or silver heirlooms, and these can be a great source of extra savings that you can invest and grow.
When you sell your silverware, jewellery, or other heirlooms, take them to a buyer who specializes in precious metals. They are more likely to pay better prices than places like pawn shops.
2 Automate Savings with Each Paycheck
Automating your savings is one of the smartest ways to contribute to your retirement fund without even thinking about it.
When you prepare your monthly budget, decide how much you can afford to contribute to your retirement with each paycheck, and set up automated contributions with your bank or financial institution.
Even if your per-paycheck contributions aren’t much, they build up over time. Plus, you won’t be tempted to spend it on nice-to-haves instead.
3 Use the Right Investment Tools
There are a number of accounts you can use to invest while reducing the taxes that you have to pay on the returns. They differ based on which country you live in, but they may serve similar purposes. In the United States, investing through an IRA (Individual Retirement Account) allows you to defer income taxes on the money you invest in them.
In Canada, an RRSP serves a similar function, allowing you to pay taxes on invested income later on, preferably in a lower tax bracket than you would have been in while you were working.
4 Research Your Investment Options
Once you start investing, you can be overwhelmed by the many different financial instruments out there. There are stocks, bonds, term deposits, mutual funds, ETFs, bullion, cryptocurrency, and more.
The right investment options for you depend on your goals, your timeline, your risk tolerance, and the fees you’re willing to pay for the people managing your investments. You may want to talk to your bank or a financial advisor about the best options for you.
5 Diversify Your Portfolio
As your savings begin to grow, it makes sense to diversify your portfolio with different assets. Financial products like mutual funds or ETFs can provide built-in diversification, as they tend to invest in a wide range of companies, but you may also want to consider other investments like bonds, bullion, or term deposits.
Given the prevalent occurrence of economic uncertainty, contemplating an investment in precious metals emerges as a logical course of action. If the prospect of acquiring gold or silver gives you pause, an alternative avenue could involve exploring the option of a platinum IRA with Gold Safe Exchange. This not only will diversify your investments but also makes you feel secure in these uncertain times.
Investing in your retirement is one of the smartest financial goals you can pursue. Investments will help your savings grow and get you ready to leave the working world behind.