It’s a new year (as of writing!), and it can be a good time to take stock of your retirement savings, take a look at your 401(k) funding levels, or even revisit your Roth IRA contributions. This may be tricky for some people, especially if you think that you might be behind on your retirement savings — but ignoring it won’t solve the problem, so it can be a good idea to take a look, consider your investment strategies for retirement, or rethink your retirement savings plan.
While this can feel like a heavy lift, maximizing your retirement savings and looking for a savings boost for retirement can be relatively easy. There are things that you’ll need to think about, of course, like your age, your risk tolerance, and more. But generally, if you feel or suspect that your retirement savings plan isn’t up to snuff, there are a few relatively easy things you can do, or steps you can take, to get back on track.
Retirement Savings Catch-Up: Step 1
A good place to start when enacting a retirement savings catch-up plan is to ensure that you actually have retirement savings accounts, and that you’re funding them. For most people, that means utilizing either an IRA or a 401(k), or their Roth counterparts. If you’re looking to catch up on retirement, or even implement some late-stage retirement tactics (for older readers), this is a sure-fire first step.
If you have one or both of these types of accounts, it can be a good idea to take a look, as mentioned, at your 401(k) funding levels or IRA or Roth IRA contributions, and adjust accordingly. Generally, the more you can save or invest, the better. It may be a good idea to speak with a financial professional if you feel like you could use guidance as well, which can help talk you through retirement deductions for your taxes, cash-value policies, and much more as it relates to financial planning for retirement.
Step 2: Look for Additional Retirement Savings Funding Options
If you have retirement accounts, or are getting them fired up, a solid second step can be to find ways to save even more. You may have an emergency fund now, and you can bet that you’ll need an emergency fund for retirees when you get older — so, you’ll want to save as much as you can now so that you’ll have more retirement income and savings later.
How do you do it? For most, it may be worth dissecting your budget to see where cuts can be made on spending, or where spending could otherwise be optimized. If you can manage to find some places to save more, that money could be funneled into your retirement savings, helping boost your eventual retirement financial security.
This isn’t easy, of course, but every little bit can help — and with the long-term power of compounding and the tendency of the market to go up over time, a little savings here and there can go a long way toward helping provide additional retirement savings.
Step 3: Max-Out Everything (If Possible)
A final step to provide a savings boost for retirement accounts is to do your best to max out your contributions for the year. There are limits to how much you can put in an IRA or 401(k) every year, and you should aim to hit those limits — again, it’ll add up over time!
For 2024, the contribution limit for an IRA is $7,000, or $7,500 for those older than 50. For 401(k)s, the limit is also $7,000, or $7,500 for those older than 50. Again, you should do your best to hit those limits.
Also be aware that there are numerous types of IRAs and other retirement savings accounts. There may be ways to actually save more than those contribution limits allow — that’s why it may be helpful to speak with a financial professional about your options. Again: See what you can do to max those contributions out, as it’ll add up over time and help you catch up on your retirement savings.
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