According to a financial survey by NerdWallet in end-of-year 2016, it has been found that about 55% of the Americans are saving all wrong and for the age group of 18 and 34 the figure is beyond 63%.
While, it is good to know that people are at least saving for their retirement, but they should be putting their money into retirement accounts that are tax-advantaged and taxable brokerage. Start building retirement fund with retirement plan like employer-sponsored and if nothing else, you can save enough to earn the full match with it.
A traditional plan can give you an quick tax break and the contributions will be taken out of your income even before they’re taxed, which will automatically lowers the taxable income, and income tax liability for that particular year. Moreover, if someone does not have an access to a retirement plan, you can opt for individual retirement account (IRA). However, this plan will not give an automatic tax break, but will surely cut your money from your taxable income, hence reducing the tax liability.
Moreover, personal saving accounts can also play an important role. They might not give you much interest to grow your wealth, but saves for you for hard times.