As I’ve gotten older (and wiser!), a lesson I learned early in life has really started to influence my financial decision making: the earlier I save, the more time my money has to grow. The concept isn’t overly complicated. Everyone knows the earlier you save, the better. The problem most have–myself included–is following through and putting money away for the future. But now that I’ve had a steady paycheck for a few years and have been focused on saving, I’m able to witness the growth in my account and I’ve got to say…I love watching my money make more money!
Every two weeks when I receive my paycheck, I make sure I do two things: pay myself and then pay my bills. Now you may be asking yourself, “what does that mean?” but the concept of paying yourself first is simple: Before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), your Roth IRA or your savings account. The first bill you pay each month should be to yourself.
I always pay myself first by contributing to my company’s 401(k) and at year’s end, my own IRA, but the amount you can save changes annually. Every year the IRS mandated retirement plan contribution limits can change, so it’s important to know how much you can contribute. The IRS has released the 2017 retirement plan limits.
Individual Retirement Contribution Limits for 2017
Curious how much you may need to save for retirement? Try this calculator to get started.