Are you thinking about retirement? Even if you haven’t saved as much as you need, there are ways to boost your retirement. If you need help in this area, you are going to love this guest post from
Danielle Kunkle Roberts from her personal blog entitled Danielle K Roberts.
Learn How to Boost Your Savings Before Retirement
Did you know that the average retiree only has around $50,000 saved once they retire? For most people, that will cover less than two years of expenses.
And living prices are skyrocketing. So much so, that even a million dollars doesn’t automatically mean that you will retire comfortably.
However, that doesn’t mean that you can’t prepare for your future. It also doesn’t mean that all hope is lost for you. Here are 3 ways to boost your savings for retirement, that won’t feel like a chore.
#1 Start Today
The number one way to boost your savings before retirement is to start now. While it’s never too late to start saving for the future, the earlier, the better.
Why is it so important to start early? Compound interest. Compound interest basically means “interest on interest”. In other words, your money makes money, and then that money makes money, and so on.
The earlier you start, the longer you have to take advantage of compound interest. And that means more money in your pocket.
For example, if you start investing $1,000 every year starting at age 25, that’s better than investing $10,000 every year starting at age 55. The earlier you start, the more compound interest works in your favor.
And the best part about starting early? You won’t have to save as much of your own money. As your money starts earning compound interest, you won’t need to add as much year after year, unless you want to. That’s because the money will continue to earn interest on whatever money you started with from the beginning.
What better way to boost your savings before retirement?
Related Money Posts:
- 7 Fun and Quirky Ways to Save Money
- Is Emotional Spending Ruining Your Budget?
- How to Budget and Still Have What You Want in Life
- How to Raise Your Credit Score by 200 Points
#2 Max Out Your 401(k) or Roth IRA
Even if you can’t save a lot of money right away, you can start saving in your 401(k) if your job offers it, or save money in a Roth IRA.
A 401(k) is a retirement plan that allows employees of a company to invest a portion of their paycheck into saving for retirement. A 401(k) is not charged any tax until after you withdraw it, preferably during retirement. And the best part? You can set it up easily and have the money automatically withdrawn from your paycheck. So most likely, you won’t even really notice that the money is being saved.
Also, your employer may have an Employer Matching Program, where they add money to your investment account, up to a certain percentage, based on how much you save. That’s free money for you!
The annual max contribution that you can make to your 401(k) in 2019 is $19,000.
A Roth IRA is an option whether you work for an employer or on your own. A Roth IRA is an individual retirement account where you set aside after-tax income. When you withdraw this money, it is tax-free as long as you are aged 59 ½ or older.
This is a great option if you want to save and invest your money, but don’t work a traditional job, or if your company doesn’t offer a 401(k). The max contribution that you can make to your Roth IRA in 2019 is $6,000, or $7,000 if you are over the age of 50.
Because these options have max contributions, you won’t feel as pressured to save as much. But every dollar saved means less that you have to make in retirement, so make them count.
Related: Swell Investing Review
#3 Make Small Sacrifices
Although you don’t have to sacrifice your lifestyle, downsizing your lifestyle just a bit can really help you boost your savings before retirement. For example, can you live in a 3-bedroom home instead of a 4-bedroom? Or, can you buy older used cars in cash instead of leasing a new one every year?
By making a few lifestyle adjustments, you can save more money in your pocket, without sacrificing your overall quality of life. However, the money you save can then be invested, which means an easy way to boost your savings before retirement!
Check out these new cash envelope labels to help you stay on budget
Related Money Posts:
- 7 Ways to Create and Absolutely Perfect Budgets for You
- 7 Things That are Killing Your Budget
- 400 Money-Saving Tips to Save for Your Future
- Is Emotional Spending Ruining Your Finances?
- Use the 30-Day Rule to Help You Save More
- How I Paid off $15,000 Worth of Student Loans the Day I Graduated
3 Ways to Boost Your Savings Before Retirement Conclusion
Overall, these 3 ways to boost your savings before retirement won’t take a lot of time or effort on your part. However, they are easy tweaks that you can make to your lifestyle that can boost your savings rate, which means you can continue to live comfortably for years to come. And who wouldn’t want that?
Danielle is a Medicare insurance expert who writes regularly for many online publications, including Forbes, where she is a member of the Finance Council. A TCU journalism graduate and former magazine editor, she enjoys sharing her knowledge about Medicare, retirement, and insurance so that baby boomers can prepare for the costs of healthcare in retirement. She regularly appears as a guest expert on healthcare podcasts and radio shows.
You can follow Danielle on social media here: