The Importance Of Saving For Your Retirement

How does one overcome fear enough to start saving for a retirement that may never come? One day at a time, that's how. Saving money can actually become more freeing and liberating overtime and here's how.

All too often people allow fear to stop them from saving money. Fear of not having money to pay bills. Fear of not keeping up with the neighbors next door. Fear of being called poor. Fear of being called cheap. Fear of dying before one could use up the money that has been saved. Fear of becoming ill and not being able to reap the rewards of all that saving. And fear of saving itself.

So how does one overcome this fear and why should they? There's no doubt that fear can stifle a person's dreams as well as one's joy in life. But did you know that this fear can also stifle one's bank account? The only way to overcome fear is to look it straight in the face and take a step forward; one step at a time, until the fear no longer controls you.

Most of us work today to spend today. But what happens when you become laid off of work? What happens if you get injured on the job and can no longer perform that job? Will you be able to survive with no income coming in? Of course not! Saving money may not be the most exciting thing to do, but it sure is the smartest thing to do. I'll let you in on a little secret, once you start saving and realize that that small amount of money is not missed, it becomes easier to save a little more the next time. The secret is to have your savings automatically withdrawn from your paycheck and placed into the form of savings you choose.

"Form of savings?", you ask. Well, there are several different ways to save money. You just have to find the one that best fits your comfort zone. Here are some great ways to put your money to work for you:

1. Municipal Bond: The government issues these bonds and in return for purchasing them, you earn interest that is exempt from federal taxation.

2. Annuities: Money lent to insurance agencies that plan to stay unavailable for fifteen years.

3. Traditional IRA: A tax-free retirement savings account, in which you pay taxes when the money is withdrawn at retirement, thus allowing the money to grow tax-deferred.

4. ROTH IRA: A tax-free retirement savings account that grows tax deferred, in which you pay zero taxes when you withdrawal the money at retirement.

5. 401(K) Plans: A retirement savings plan with your employer that allows you to save and grow tax deferred savings. It's a great way to lower your annual taxes to the tax man, while saving for your retirement.

6. Mutual Funds: A portfolio of stock options that someone else manages, on your behalf. The great thing about mutual funds is that your money is pooled together with the money of other people. This allows the fund manager to purchase larger quantities and variations of stocks, which in turn helps you grow richer faster than placing your money in a bank savings account. The best part about mutual funds is that you have the option of going low risk or high risk. The higher the risk, the more money you are bound to make at a faster paste. However, you will have a higher risk of the company portfolio losing money as well. But not to worry, since you have to contribute to mutual funds on a monthly basis, the highs and lows tend to balance out in the end.

7. Stock Options: Individual shares of a company that are purchased and sold at random. This is the riskiest form of investing and should not be done unless you have some "play" money to spare.

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