Everyone dreams of retiring comfortably, but are you working toward that dream today? If you don’t start saving now, you may struggle to cover your living expenses once you’re retired.
According to the Social Security Administration, one out of every four 65-year-olds alive today will live past age 90, and one out of every 10 will live past 95. A longer average life expectancy means a longer average retirement. Once you retire, you may have to cover your living expenses for decades.
Below are five ways you can boost your retirement savings and get your future on track.
Take Advantage of Employer-Sponsored Plans
An employer-provided retirement plan allows you to contribute pre-tax funds, which can be a major advantage, as it enables you to invest more of your income without drastically altering your monthly budget. If your employer offers a match, be sure to contribute enough to take full advantage. A match is essentially free money, so don’t pass it up.
For ministers and ministry employees, our MBA 403(b) Retirement Plan offers a variety of self-directed investment strategies, including index funds, actively-managed funds, target-date strategies, risk-based strategies, and our proprietary MBA Income Fund, which has provided a stable return to participants for over 60 years.
Consider Adding an IRA
Many people don’t realize that you can contribute both to a workplace retirement plan and an IRA. Doing so allows you to save more money for retirement.
A traditional IRA and a Roth IRA are the most common plans, and each has their own benefits. Learn more about which type of IRA might be right for you here.
Set Up Automatic Contributions
As with any savings plan, the best way to set money aside for the future is to pay yourself first. By automating your monthly contributions to your retirement account, you can avoid the temptation to spend the money designated for your savings on something else.
Create Saving Goals
Develop goals for your retirement savings to help keep you on track. Use a calculator to estimate how much you’ll need for retirement and set goals along the way. Reaching a smaller goal can give you a sense of accomplishment and motivate you to keep reaching for your larger savings goal.
Find Ways to Save More Money
Take a close look at your budget and identify any areas where you can cut back on spending. Click here to read 52 Ways to Save. In addition, every time you receive a raise, increase your retirement contribution by a percentage. And anytime you earn a bonus or receive a tax refund or other extra money, consider dedicating those funds to your retirement plan.
Another way to free up more money for retirement is to work on paying off debt. If you’re only making the minimum payments on your credit cards or loans, you’re losing money in interest that could be going to fund your retirement savings. Try to pay extra each month, and once your credit card balances are paid off, make sure to pay the balance in full every month from then on.
Saving enough money to support you in retirement may seem like a challenging goal, but with planning, you can accomplish it. And, thanks to compound interest, the earlier you begin saving for retirement, the better off you will be. Start saving today for your future.
This information is not legal or tax advice. Information is from sources deemed reliable. Information is subject to error, omission, withdrawal, or change. Contact your own legal or tax advisor before taking any action that would have a legal consequence.