Relying on Social Security as a senior is pretty common these days. However, the benefits of Social Security are not always enough to accommodate those who don’t have any additional income.
A nest egg is a form of savings that is generated during a person’s working years. This money is then utilized once they retire and are no longer receiving any income. A nest egg is used to provide you with enough money to live comfortably once you retire.
Building Your Nest Egg
Everybody is different. And the same could be said about your nest egg. Some will recommend a $1 million nest egg, while others will recommend having 8 times your total salary. The reality is that everyone’s situation is different, and you may wind up needing more or less than somebody else.
But the important thing to remember is that the earlier you start saving, the more money you’ll generate.
Where do I build a Nest Egg?
The most common places for building a retirement savings are in an IRA or a 401(k) account. Both of these types of savings account will reward you with immediately with tax-free contributions, while allowing tax-deferred money growth. This means that taxes on your investment’s growth will not be paid until withdrawal for retirement.
Other options such as a Roth IRA will allow you to pay taxes up front, allowing you to make tax-free withdrawals during retirement.
Regardless of where your nest egg lives, the idea to remember is to save as much as you can as earlier as you can to offer yourself the best possible retirement situation. A comfortable retirement starts with a solid investment portfolio.
Source: https://www.fool.com/knowledge-center/what-is-a-nest-egg.aspx
