Whether you are still decades away from retirement and it’s the furthest from your mind, or are nearly completion of your working life, chances are that you do not have as much as you had hoped by this time in your life for whatever reason, and it’s getting scary that you will not have enough come retirement. While I’d caution to say it’s never too late to catch up, but the earlier you can start to putting a real focus on retirement the better, so it can have time to grow and maximize what you can have when you finally do walk away from work.
Max Out Contributions
The best way to really build up your retirement account is to, well, max it out. With a 401(k) you can contribute up to $18,500, while even more at $24,500 if you’re over 50 years old. If you’re thinking of using an IRA, the limits are $5,500, or $6,500 if you’re over 50. These are huge amounts to put into an account each year, so if this is in serious consideration, then you will have to take a look at your overall finances to see how you can free up money each month.
Use Raise & Bonus
If the contribution limits are tough to reach, and for most they are, you can use what you already don’t notice: a future raise or bonus. If you can put that into a retirement account as quickly as it comes into your bank account you will have less temptation to get used to the money being there and more likely to spend it. Every little bit helps, and just think if you get a 3% raise, that is 3% more that you are putting into your retirement account that will make a significant difference over time compared to what you are putting in there now.
Pay Yourself First
You are probably working on setting up your children for the future, whether that is with a college fund or even building an account to save for a wedding or help with a down payment, but if you are not contributing much to your retirement account then you may want to pay yourself first, as you cannot take out a loan to pay for retirement, but your children can. After all, did you have help paying for college or buying a house? Probably not, so a student loan is definitely doable for your children to take out when they start school.
May Have to Keep Working
If you are having trouble meeting what you need in retirement to continue to enjoy life’s experiences, then you may just need to delay retiring by a couple years. At least this way you have a little more chance to get your finances in order, not to mention delaying could mean you are then able to capitalize on Social Security increases if you wait after 67 until you’re 70. If continuing your job isn’t an option at least you could get a side job for the extra income to at least have that flowing in.