There are few of us in this country that haven’t heard about the importance of saving for our retirement. With company-sponsored retirement and pension plans going the way of the dinosaur and lifespans extending farther for us than any other previous generation, even those in their 20’s have come to understand that if they want to have money to last their entire lives, then they’ll be best off by starting their retirement planning ASAP. But what if you’re barely paying your bills now? How do you squeeze those extra dollars out of a paycheck that just doesn’t seem to have any juice left? By approaching saving from a strategic point of view. Try implementing the following tips, and begin to build your retirement accounts even with that tiny salary.

  • Consider it part of your job perks. When looking for a job, look further than just your salary. Make sure that the company you are considering offers retirement benefits as part of your compensation package.
  • Find the tax breaks. Even small contributions to an IRA or 401(k) can help defer income tax payments. Reduce your taxable income by making pre-tax contributions to retirement plans and enjoy the tax benefits twice.
  • Become a saver to get additional credits. Those earning a low- to moderate income are eligible to additional tax credits. When contributing to a 401(k) or an IRA, individuals that earn less than $29,500, heads of households that earn below $44,250 and couples earning less than $59,000 may qualify for a tax credit up to $1,000 per individual or $2,000 a couple. Of course, the amount of credit depends on how much you are able to contribute towards your retirement and how much you earn.
  • Do your homework. The key here is to do your best to avoid unnecessary penalties and fees. Make every dollar count by watching just how much you pay for investment management and accounts.