It’s a far too common problem for people to find that they don’t have enough savings by the time they reach retirement age. You can avoid this problem by developing a retirement savings strategy today. The sooner you get started, the better off you’ll be when you’re ready to retire. Your strategy should start with ensuring you’re saving something out of every pay period, but you should also explore your options for how you’ll grow your retirement wealth.


Calculate Your Social Security Income

Generally, most people need 80% of their annual working income to retire fully. You should get up to 40% of that amount from Social Security benefits, but that amount may be a little lower. You can get a more accurate estimate of your social security benefits by visiting the Social Security Administration online or by calling their office. If you do find that you’ll be getting less than the expected 40%, be sure to figure the difference into what you’ll need to save on your own.


Join Your Employer’s 401k Plan

If your employer offers a 401k plan, you should join it as soon as you’re eligible. This is a convenient way to contribute to a retirement plan since the money is automatically deducted from your pay. Those deductions are also tax free, allowing you to pay less in income taxes each year. The most attractive reason for joining a 401k is that your employer will match your contributions up to a predetermined percentage. Once that money has been vested, it’s yours to keep.


Start an IRA

You can start a self-directed IRA if you want to include nontraditional retirement investments in your portfolio, such as real estate holdings. Otherwise, a traditional IRA is satisfactory. Either type of account allows you to save more for your retirement, although you’ll be limited in how much you can contribute year by year. You can contribute up to $6,000 into an IRA each year. If you’re 50 or older, the IRS allows you to make a catch-up contribution of an additional $1,000.


Above all, you should avoid withdrawing or borrowing against your retirement savings. This will put you behind by the amount you borrow in addition to losing the wealth you could have earned if you hadn’t accessed your retirement funds. It makes better financial sense to take out a personal loan in an emergency and keep your retirement savings working for you.