Retirement is something that a lot of people don’t think about until it’s too late. By saving early, you can guarantee that you won’t have to work until you drop. However, many people aren’t sure where to start. What’s a retirement plan? How much do you have to save? Where do you save it? This article aims to clear up some confusion on how to start saving for your retirement today, so you don’t have to think about it tomorrow.

Start saving money early

This may come as a no-brainer, but the sooner you begin to plan for your retirement, the more you’ll have saved by the time you’re ready to call it quits. Even a difference of saving 5 years earlier means that you’ll have that much more money saved up for your retirement fund. Whether you put that money in an Individual Retirement Account, or you invest in a 401(k), as long as you are putting money towards your retirement, it still adds up.

Invest in a 401(k)

If you have access to a 401, by all means put money into it. Not only will that pay out in the future, but it’s money put towards a good cause – you! Most employers allow you to automatically withdraw money from your paycheck into a 401(k), making it one of the easiest ways to start saving.

Know how much you’re going to need when you retire

The average American uses about $50,000 annually to maintain a livable standard. When you retire, you should plan to use about 70% – 80% of that annual income to keep you afloat while you await State Pensioners income. Planning this accordingly can be a bit tricky, but if you constantly put in a retirement fund, the interest and savings add up to a very comfortable living when you retire.

Start an IRA (Individual Retirement Account)

What better way to save for retirement than to start your own retirement fund? Doing this early, and constantly contributing to this account will ensure that your savings start to add up sooner rather than later. This is a great option for when your employer doesn’t offer a 401(k) or you would rather invest the money yourself.

Don’t withdraw from your retirement savings

The number 1 mistake that many people make is withdrawing from their retirement fund in the event of an emergency. While the unavoidable can happen to anyone at any time, what you should do instead is start a separate emergency savings fund. That way, you aren’t dipping into your retirement, and potentially losing out on tax and interest benefits. Worse, withdrawing from your retirement fund could incur fees that hurt you even more.

When planning for your retirement, the most important thing you can do is start saving as soon as possible. It is never too early (or too late) to start saving for your retirement, and while it may seem complicated at first, practicing good investment habits will save you and your money in the long run.