3 frequently asked questions about saving for retirement

You know that it’s important to save for retirement, but are you familiar with the best way to go about it? Here are the answers to three common questions people have about putting aside money for the future.

1. Is a traditional 401(k) your best retirement saving option?
A traditional 401(k) is a great retirement saving tool that allows you to set aside and invest your earnings. The key point to keep in mind is that you won’t pay any taxes on the money until you withdraw it in your retirement years. However, some employers also offer the option of putting money in a Roth 401(k), which allows you to contribute after-tax dollars and withdraw the money tax-free during retirement. If both options are available to you, speak with a tax professional to find out which is most beneficial.

2. Should you put more money aside as you get older?
It’s wise to review the amount of money you put aside every year to keep up with inflation. Moreover, many people are able to save more as they get older because they have a higher income and decreased debts.

3. How much money should you set aside at a minimum?
Experts recommend setting aside at least 15 percent of your pre-tax income. That said, you should have an emergency fund with enough money saved to cover living expenses for three to six months.

If you have more questions about saving for retirement, reach out to your financial institution.