Even if you have the best intentions of saving as much money as you can for retirement, it’s not always easy to stay the course. And for this reason, you may soon find that you have some catching up to do.
If you’ve fallen behind, do these things to catch up on your retirement savings in the near future.
1. Reduce your spending
The more money you spend the less money you have to save for retirement. It’s pretty simple. So, if you reduce your spending — even if only by a few dollars per month — you can more easily ramp up your retirement savings.
Start small, track your progress, and continually look for new ways to save money.
2. Boost your income
Along with reducing your spending, boosting your income will give you more money to save for retirement. How you do this depends on a variety of factors. For example, you may find that it’s best to seek a new job with a higher salary. Or perhaps you keep your current job and launch a side gig.
3. Fully fund your retirement accounts
This is where many people miss out. No matter what it takes, do your part in fully funding your retirement accounts. If you fail to do this, you’re missing out on your best opportunity to save for the future.
Tip: your employer may offer a company match. Don’t miss out on this free money.
4. Consider a catch-up contribution
Depending on your age, you may be eligible to save more money in a retirement account through a catch-up contribution.
For example, the 401(k) contribution limit for 2022 is $20,500. However, the catch-up contribution allows workers to add an additional $6,500. You’re only eligible if you’re age 50 or older.
5. Look for ways to save outside of retirement accounts
It’s good practice to max out your retirement savings, but don’t stop there. You can also save money outside of retirement accounts. Consider a high-yield savings account, certificates of deposits, and a broker account.
As you experiment with these options, you’ll come to find that some are better for your financial circumstances and goals than others.
Answer these questions
How do you feel about the current state of your retirement accounts? Are you ahead of the game? Have you fallen behind? What are your plans over the short and long term?