If you’re behind on your retirement savings goals, it’s time to focus on catching up. According to an article on Yahoo, Americans are dropping the ball on savings. Despite 77% of Americans having a retirement plan as determined by a TransAmerica Center survey, most are not saving enough to fund their post-retirement life at the same level as their working years. Falling behind on your retirement contributions can have a huge impact on your nest egg. Here are some tips to catch up on retirement savings.
Ten Tips to Increase Retirement Savings
- Create a retirement savings goal and stick to it. If you haven’t started yet, start now. It’s ok to start small. If you’ve gotten behind, get back on track today. Automating your saving is a great way to stick to your savings goals. Have your employer direct deposit part of each pay into a retirement savings account. You can also set up recurring transfers from your checking to retirement savings accounts. Examine your goals annually and adjust those goals to account for changes in your lifestyle. The more your income increases over the years, the more you should be saving for retirement.
- Reduce your expenses. Examining your budget to reduce expenses is a great way to get back on track with your retirement savings plan. Do an audit of all of your monthly expenses. Reduce unnecessary expenses and focus on saving more.
- Pick up a side job for more discretionary income. Working a side gig and saving the extra income is a great way to increase your retirement savings. If you have any extra cash throughout the year, whether it be from a second job, a bonus at work, or even a monetary gift, prioritize saving.
- Max out your retirement accounts. Be sure to fully fund your retirement savings accounts, including the catch-up contributions. You can learn more about limits on contributions and benefits, as well as catch-up contributions, on the IRS website. Catch-up contributions allow workers aged 50 and older to save more for retirement. Taking advantage of catch-up contributions can significantly boost your retirement savings. Speak to your tax advisor to learn more.
- Make the most of your employer’s 401(k) match. If your employer offers a 401(k) match up to a certain amount, be sure you take full advantage of those match benefits. Remember that the matching funds are basically free money you receive.
- Open an IRA. If you don’t have access to a 401(k) at work, you can still save for retirement with a traditional IRA. You can also have an IRA in addition to your 401(k). Tap to learn the benefits of opening an IRA at Benchmark FCU.
- Save more than just in your retirement accounts. Although you may max out your retirement accounts, it doesn’t mean you have to stop saving. You can save or invest more money in other types of accounts, you just won’t get the tax break you get with a retirement account. In the end, it will help you reach your retirement savings goal.
- Pay off high-interest debt to focus more on savings. You will save on interest and be able to budget more for retirement savings. Look into the various Benchmark Federal Credit Union loan options to help you achieve your debt consolidation goals.
- Diversify your investments. Maintaining a diverse portfolio will help you better navigate the ups and downs of the market. Speak to your financial advisor to learn more.
- Make saving a priority. Finally, no matter what obstacles life throws your way, prioritize saving.
Making consistent contributions to a retirement savings plan throughout your life is the best way to ensure a financially comfortable retirement. Paying off debt and maximizing savings is a great way to keep the focus on growing your retirement nest egg. Want to learn more about saving for retirement? Read our blog “A Guide to Retirement Savings by Age.”