Some people start saving for their retirement almost as soon as they enter the world of work, while others take a more relaxed approach, such as waiting until retirement is just around the corner. Obviously, the former option is the more sensible, as the earlier people start to save for their retirement, the more money they will save, and the more time their investments will have to mature. Having said that, it’s never too late to act if you want to give your retirement pot a top-up. Whether you’re just getting started or you’ve been at it for years, here are 6 tips to boost your retirement savings.
1. Get an individual retirement account (IRA)
Hopefully, you have a 401(k) plan through your employer, which should provide a good starting point when combined with your Social Security benefits. In addition, it is worth considering setting up an IRA as contributions can be tax-deductible, and investments can grow over time. It is also worth automating your savings each month, ensuring that you set some aside for your future before you pay anything else with your wages.
2. Consider buying an annuity
Many people choose to buy an annuity with their savings. With an annuity in place, you will receive a guaranteed income for a fixed term or the rest of your life. It is important to consider all the available options.
3. Cut down on unnecessary expenditure
If you are finding it difficult to save for retirement, it might be time to assess your budget and expenditure to see if there is anywhere you can reduce your outgoings. For example, you might be paying a higher than necessary premium on your insurance policies, using a lot of gas and electricity at home, or ordering takeout just a little too often. Look for small ways that you can cut back and, if you find enough of them, you could end up with a lot more cash to save.
4. Set yourself a retirement goal
It is important to have a realistic picture of how much money you will need to live a comfortable retirement or cover the basic living expenses. When you know that your future prosperity depends on your savings, you are more likely to feel motivated to keep it in mind and possibly save a bit harder.
5. Push your retirement back
If you can delay taking your social security for one, two, or a few years, the amount you eventually receive will be higher. This is because waiting will increase the monthly benefit, adding up quickly, so if you do not need to claim it, consider delaying your retirement.
6. Save any unexpected extra cash
Now and again, you may have some extra income or unexpected cash, or you might receive a promotion at work. It can be tempting to spend this money on something short-term or to live a more luxurious lifestyle. However, the smarter move would be to spend a little of it on enjoying yourself, but then to put at least some away in your retirement fund.