It’s never too early to think about retirement. Unfortunately, many Americans don’t plan for their retirement until it’s too late. According to the United States Department of Labor, “In 2014, 30 percent of private industry workers with access to a defined contribution plan (such as a 401(k) plan) did not participate” (DOL). This post will explain some of the best ways to plan for retirement.

Start Saving

Saving money is the first step to retirement. If your employer offers a retirement plan, like a 401(k), then you should take advantage of it. 401(k) plans are useful because the money you contribute is automatically deducted from your paycheck. Some employers even offer to match the amount of money that employees add to their 401(k). Companies that match 401(k) contributions usually require employees to add a set amount of funds each month.

By monitoring your spending habits, you can increase the amount of money you save each year.  There are numerous online resources that help you track expenses. For example, the website Mint gives you the tools to create a monthly budget. If you eliminate unnecessary expenses, you can take the money you save and put it toward your savings.

Individual Retirement Account

If your employer doesn’t offer a 401(k) plan, you should contribute money to an Individual Retirement Account (IRA). You can contribute funds to either a traditional IRA or a Roth IRA. The accounts are taxed in different ways, so do your research before you select an option. With an IRA, you can also set up automatic payments to the account each month.

Compound Interest

Compound interest works on your behalf. The earlier you contribute funds to an account with compound interest, the more savings you will see in the long run. Compound interest earns interest on the money you invest, and then it earns interest on that interest.

Earnings Potential

Advancing your education and developing your skills are two of the best ways to increase the amount of money you earn over time. Many employers offer discounts for education. Some even offer complete tuition remission. You can also take online classes to earn specific certifications. The number of sites that offer education opportunities continues to grow each day.

Eliminate Debt

Debt is one of the largest obstacles that can hold you back from living in comfort once you retire. Work hard to eliminate your debt now, and you will have more money to contribute to your retirement savings. Again, it’s important to keep track of your expenses. You don’t want to waste money that could otherwise go towards savings.

Leave Your Savings Alone

After saving a large amount of money over the years, it becomes tempting to withdraw the funds early. Withdrawing money before retirement is one of the biggest mistakes that people make. When you withdraw money early, you lose out on gaining more interest, and you hurt your principal. It’s also likely you’ll have to pay withdrawal penalties.

Don’t Be Afraid To Ask Questions

If you are not sure how to reach your retirement goals, don’t be afraid to contact a financial adviser. A financial adviser will be able to guide you through the process of creating a retirement plan. Saving money for retirement is one of the most important things you can do now. Start saving today, and you will have fewer worries in the future.