No matter which life stage you’re at, it’s never too early or too late to start, boost or ramp up your retirement savings plan. Compound interest is pretty much a miracle worker, so it helps to start sooner, of course, but if you’re feeling a bit behind on your plan, there’s lots you can do to catch up.
It's the only time you really have, after all. Whether you make your first deposit or you make your first increased deposit into the fund, do it now! You’ll never have more time than you do now, so every little amount makes a big difference.
Contribute to your 401 (k)
If your employer offers you a 401 (k), then you can make your contributions out of your pre-taxed money, which makes a big difference. Essentially, if you’re taxed at 15% and you plan to make monthly $100 contributions, this $100 is taken from you before it’s taxed, so you actually only “lose” $85 from your take-home pay.
If you have a Roth 410 (k) then you can supplement it with other assets besides money, like precious metals. You can easily afford 1 ounce of gold from Golden Eagle Coin once a year or so, but you need to get tax advice before going ahead.
Take advantage of your employer’s match-funding
If your employer match-funds your contributions, then make sure you’re getting as much as you can out of it! For example, if you’re putting $3,000 a year into your 401 (k) and your employer matches up to 50% of this, then you could be getting $1,500 for free each year! If you can run to this amount comfortably, then do it!
If you’re over 50, then look at catch-up contributions
If you feel you’ve left it too late and your pot is looking emptier than you’d like then you can exceed the usual 401 (k) and IRA annual limits to a certain extent. There’s a handy chart which shows you how much in catch-up contributions you can deposit each year.
Stop spending so much!
Use a budget calculator to work out where you’re wasting money and commit to reducing or even eliminating these resource drains. It could be the coffee and pastry you have every day on the way into work, or that magazine subscription that you’ve forgotten about. Think about it, if you put the, say, $500 a year you save into your match-funded 401 (k), then that’s an extra $750 each year!
Stop seeing extra money as fun money
OK, you got a raise! Great. This doesn’t mean you take yourself off to the golf store. What you should do is commit half of this new money to your retirement fund – you can have some fun with the remainder, after all, you work hard enough.
Delay claiming your Social Security payments
The earliest you can start claiming your Social Security retirement benefits is 62, but if you can put this off, even by just a year, then you’ll get more each month when you finally do claim it. Many of us are in good health for longer these days, so make it a priority to stay in good shape so you can work for a few years more.