It’s not surprising if you’re looking for ways to improve your retirement savings. Unfortunately, not everyone has a plan for the future or has the savings to ensure they don’t have to work for the rest of their lives. Believe it or not, 13% of Americans have no retirement savings at all.
Luckily, you have options if you’re ready to improve your retirement accounts.
Are you interested in learning more about how to increase your retirement savings? Check out the seven retirement saving tips below to store enough cash away for retirement.
1. Begin With a Goal
Many people dream of retirement without a plan to get there. They flow through life without a plan for the future, and unfortunately, many of those people end up with not enough money to take care of themselves in retirement. Because of that, they work past their retirement age.
One way to stop this from happening is to plan for your future. Determine what age you want to retire and how much money you want to withdraw from your retirement every month.
Once you have those two things, you can figure out how much money you need to save. This number helps plan your investments and determine how much money you need to make.
2. Start a 401(k)
Investing in the stock market is the most common way for people to grow retirement accounts, and a 401(k) is one of the most effective methods. A 401(k) is a sponsored retirement account offered by companies. You work full-time and set aside a portion of your earnings every month to put into the account.
A traditional 401(k) gets used with pre-tax money. That means you don’t get taxed on your income until you withdraw it from your 401(k) account. The other retirement account, a Roth account, uses post-tax money and can be withdrawn without getting taxed.
One of the biggest reasons to put money into a 401(k) account is because many employers offer 401(k) matching. Your employer will match your investment up to a certain amount, drastically increasing your retirement savings.
3. Invest in Assets
While a company stock program is a great way to set aside money for retirement, it does have limits. Most of the time, there’s a maximum amount of money you can set aside every year in your retirement accounts.
If you have money left over and want to build retirement savings for high income, it pays to invest your money in other areas. If you leave it sitting in a savings account, you’ll lose purchasing power due to inflation.
One asset people invest in is real estate. Many people buy properties to fix and rent to tenants. It not only gives you extra income, but it also grows your net worth as the home’s value goes up over the years.
4. Earn Extra Money
In today’s world, you aren’t limited to working only one job. You have access to the internet to find work and have countless apps that allow you to work on your own schedule.
That’s why many people now supplement their income using side-gigs. Whether you go the freelance route and take on your own clients or work for apps offering things like ride-sharing, it’s easier than ever to make extra money.
Think about your current goals and how much money it will take to accomplish them. You can use your supplemental income to meet your goals or even move your retirement year up.
5. Use Catch-Up Contributions
Not everyone has the chance to contribute to retirement accounts during their lives. Whether it’s because they don’t have a job that offers good investment matching or don’t make enough money, they don’t have nearly as much money in investments as they should.
The good news is that you have a chance to rectify that situation when you turn 50. Once you turn 50, the amount of money you can contribute to your retirement accounts increases. If you work a good job, you can drastically increase your investments during this time.
While it doesn’t make up for not investing earlier in life, it does offer you a way to prepare for the future.
6. Delay Social Security
Social security is automatic. Once you reach a certain age, you’re guaranteed to get a government payment for the rest of your life. Most people don’t know that you can change the age you start receiving payments.
When you delay receiving social security, you continue contributing to the social security fund. When this happens, the amount of money you get in retirement increases.
This is very important if you don’t have much retirement savings. The extra money can make the difference and provide a more comfortable retirement.
7. Start Saving Today
You have no time to waste when you want to start saving for retirement. You rely on compound interest to grow many of your investments. That means every day counts when you’re trying to grow your wealth.
Whatever option you choose, start as soon as you can. The longer you wait to start saving, the more money you’ll miss out on in the future.
If any of the options in front of you are complicated, settle with a simple index fund. Set aside money every month, and your investment will pay dividends and continue to grow until you retire and start withdrawing your money.
Now You Can Start Maximizing Your Retirement Savings
You can’t afford to have zero savings when you get older and have a harder time working. Even if you don’t make a ton of money, there are always options for increasing your income and cutting on costs to save more money. Use the tips above to increase your retirement savings and set yourself up for the future.
Do you want to learn more financial tips to help improve your lifestyle? Check the latest articles on the blog to learn more tips to help manage your money.