This article contains 8 tips to help you boost your retirement savings. So, if you’re taking retirement planning steps, you should read through them. To have a secure and comfortable future in retirement, you need to have enough money in your savings account.
The earlier you start saving for retirement, the more money you’ll have when you want to retire. However, if you didn’t start saving early, this article has got you covered. Although, you can’t change the past you can still work on the future.
8 Tips to Help You Boost Your Retirement Savings
Below are some tips that will help you boost your retirement savings
Start Saving Now
The truth is the earlier you start saving for retirement, the better it will be for you. Thanks to the power of compound interest, when you save money, you’ll earn interest on your savings. Then this interest will earn more interest on itself and the amount will continue to compound monthly.
And the earlier you start saving, the longer time you’ll have for your money to compound till you retire. So, start saving as soon as you can today so you’d be able to build enough wealth for retirement.
Contribute to Your 401 (k) Account or Workplace Retirement Plan
If you’re working in a company and your employer offers a 401 (k) plan, then you should take advantage of it. This is not only a great place to start saving, but it’s also one of the best places to boost your money. In this account, you’ll be able to contribute pre-tax dollars.
This means that you won’t pay income taxes on your savings. Your contributions will grow tax-deferred till you start withdrawing when you retire. However, some employers offer Roth 401 (k) accounts. This could be most suitable for you if you expect to have a higher tax bracket after retirement.
Meet Up with Your Employer’s Company Match
One thing about a company’s retirement plan is that they offer matching contributions. For every dollar, you contribute to your 401 (k) account, your employer will match your contribution with cash too wholly or partially.
So, if your employer offers to match your 401 (k) contribution, ensure that you contribute enough to take full advantage of the match. This will help to boost your retirement savings.
Open an IRA
Although IRAs do not offer a matching contribution, they can help you accumulate your retirement savings. There are IRA options, traditional and Roth IRA. Contributions to a traditional IRA are tax deductible and they grow tax-deferred.
However, a Roth IRA might even be a better option for you if you expect to have a higher tax bracket after retirement. If your employer does not have a 401 (k), an IRA could be the best option for you. And you can even boost your retirement savings by contributing your IRA in addition to your 401 (k) account.
Automate Your Savings
By automating your contribution every month, you won’t forget to send the money into your retirement account. That’s because as soon as your paycheck arrives in your account, your monthly contributions will be transferred to your retirement account.
And if you’re using your employer 401 (k) plan to save, your contribution will be deducted even before you receive your paycheck.
Take Advantage of Catch-up Contributions
One thing about 401 (k) and IRAs is that there is a limited amount you can contribute to them every year. However, if you’ve reached 50 years, you can make go beyond normal contribution limits by making catch-up contributions. This is another way to boost your retirement savings.
Budget Your Spending
Every single amount you spend can add up to boost your retirement savings. While you can’t avoid spending, you can minimize how you spend. You can negotiate your insurance rates or switch to an insurance plan with a cheaper rate but with quality coverage.
Moreover, if you’re paying for unused subscriptions monthly, you can cut them off. It will be helpful if you create a monthly budget and record every single thing you spend.
Delay Social Security till You’re Closer to Retirement
From age 62, you can take your social security benefits. However, if you delay taking it till you’re 67 to 70 years, you’ll receive a higher amount. That’s because social security benefits are increased by a certain percentage when you delay your benefits till your full retirement age. It can even increase potential future survivor benefits for your spouse.
What is the Best Place to Put Your Retirement Savings?
This depends on your financial profile, family situation, income, and needs. What could be best for you might not favor another person. Retirement savings account also have tax advantages. While some are designed to save pre-tax dollars, others are for after-tax dollars.
So, depending on your financial profile, you are to choose one that’s suitable for you. However, some good options include 401(k)s, 403(b)s, life insurance plans, and traditional and Roth IRAs.
What is the Most Important When It Comes to Saving for Retirement?
The most important thing when it comes to saving for retirement is to start early. The earlier you start saving for retirement, the more interest you’ll receive in your investment accounts over time.
How Can I Jumpstart My Retirement?
Below are some tips that will help you to jumpstart your retirement planning
- Define your assets.
- Reassess your savings.
- Explore retirement income sources.
- Work with a professional.
What are the 5 Phases of Retirement?
Retirement can be broken down into five different stages and which include
- Pre-retirement phase.
- The honeymoon phase.
- Disenchantment phase.
- Re-orientation or finding yourself phase.
Where is the Safest Place to Put Your Retirement Savings?
The safest place to put your retirement money is in low-risk investments and savings vehicles that provide guaranteed growth. This includes fixed annuities, Treasurys, corporate bonds, CDs, and money market accounts.
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