A majority of Americans are afraid that they won’t have enough money saved for retirement to live comfortably. According to a recent report from the Transamerica Center for Retirement Studies, nearly half of current retirees say they waited too long to begin saving for retirement and 61 percent of respondents expect Social Security to be their primary source of retirement income. Fortunately, it is never too late to boost retirement savings. Here are some tips that can help you reach your retirement savings goals.
Start Saving More Now
The sooner you start saving more for retirement, the bigger the benefits will be. If you have not yet started saving for retirement, start with $100 and go from there. Every dollar that you are able to sock away will grow through interest until the money is withdrawn in retirement. Thanks to the power of compound interest, small contributions can grow to big balances over the years. Start saving whatever you can today.
Take Advantage Of 401(k) Benefits
A traditional employer-based 401(k) plan allows you to contribute pre-tax money to boost retirement savings, which can be a significant advantage. These plans let you can invest more of your income without feeling it as much in your monthly budget since that money comes out of your paycheck before taxes are assessed. Many employers also offer matching contributions for the accounts, essentially giving you free money to save for retirement. Make sure you contribute enough to get the full employer match.
Boost Retirement Savings Further With An IRA
Saving money in an individual retirement account (IRA) is another good way to build your nest egg. Contributions to traditional IRAs may be tax-deductible and the investment earnings have the opportunity to grow tax-deferred until you make withdrawals during retirement. There are several different types of IRA available, so do some research to determine which one is right for you before you open an account.
Automate Your Retirement Savings
Automating your retirement savings lets you save for retirement without having to think about it. Workplace based retirement plans makes this easy for you by deducting your retirement plan contributions from your paycheck each pay period. Banks and brokerages that hold retirement accounts often have ways for you to automate your contributions and investment selections through their websites. A set-it-and-forget-it plan is one of the best ways to ensure that you continue saving for retirement.
Join our newsletter
Subscribe to get the latest "Engineer Your Finances" content via email.