7 Ways to Help Boost Your Retirement Savings

0
99
retired couple

Everyone looks forward to, at some point, retiring. Unfortunately, few of us ever implement the best retirement savings strategies to maximize our nest egg. When it comes to your retirement savings, the earlier you start, the better.

This guide will teach how to boost that “I’m done working” fund to ensure you have the proper capital to retire comfortably.

#1: Create Your Financial Goals

Before you begin trying to maximize your retirement savings, you need to identify the amount you’ll need to save. You might want to use a retirement calculator or speak to a professional. Remember: a ballpark figure is better than none.

Once you have your goals in place, they will influence the decisions you’re going to make around your retirement savings.

For instance:

  • Will you need to get aggressive with your retirement assets?
  • At the rate you’re going, how many years will you need to reach the desired amount?
  • Will you need to supplement outside of your Social Security benefits?

#2: Tax-Deferred Retirement Accounts, Make Them Roths

Your Roth account is tax free. Should you have a strong holding in 401(k)s and IRAs, then you could potentially transfer them into a Roth. While you’ll have to pay taxes on the year of the transfer, every year following you won’t have to.

Keeping your retirement savings in tax-deferred accounts is risky due to the volatility of taxes. Should they increase, then you’re losing money. Moving them to a Roth creates safeguards for your retirement fund.

Advertisementfree yourself from chronic pain

#3: Try to Max Out Your 401(k)

Should you have an employer that matches your 401(k) contributions, then take advantage of it. If you truly want to boost your retirement savings, you need to leave behind the idea of now. Additionally, you might consider making “catch-up” contributions if you have been less committed in the past.

#4: Diversify Your Portfolio

retired couple finances

Dependent on where your retirement funds are located, you might want to be a bit riskier with your diversification. Consider mutual funds, ETFs, and stocks that pay dividends. If you’re still decades away from your retirement, then even better.

#5: Reverse Mortgage

A reverse mortgage is usually viable for someone who is above 60 years old. Essentially, it’s a loan that’s borrowed using the property as security. Unlike traditional mortgages, you don’t have to start repaying the loan until you have moved out of the house. Thus, you can use the money to invest in a safe, secure, and risk-averse retirement fund, allowing it to grow as you still live in the home.

For instance, if you live in The Lone Star state, then consider a Texas reverse mortgage. This will allow you to withdraw capital (it’s not free money) and put it towards retirement. When it’s time to pay the loan back, you can factor this into your budget.

#6: Get Rid of Debt

Just like you need to remain healthy during this era, your finances need to maintain their integrity until you’re ready to “sign off.” That means not carrying any debt into your retirement. Additionally, if you’re in thousands of dollars’ worth of credit card debt, interest is eating away all the extra money you could be putting in your retirement fund.

Try using a budgeting app and rethinking the way you spend money. You want to be debt-free with an income that allocates at least some portion to your retirement every month.

#7: If You’re Still Young, Consider A Second Job

If you don’t have much to contribute to your retirement fund, then a second job is always an option. From structured freelance jobs (like Uber or Postmates), to leveraging your skill set for supplementary income (Upwork), a second job could increase your income and allow you to maximize your savings.

Tip: Supplementary income, no matter what your situation, is always beneficial. Take a second job and segment that income from your usual finances. Allocate it to emergency, retirement, and vacation funds. That way you’re saving for retirement but you’re also paying for your trips while you age. It’s both intelligent and incentivizing.

Retiring the Right Way

You need to understand that the role you play today affects your tomorrow. No matter what your situation is, you need to start saving as early as possible, with constant and strategic contributions. By planning now, you’ll be able to create a nest egg that doesn’t just let you get by, but allows you to live the lifestyle you deserve.

Does your dream retirement involve sandy beaches and an ice-cold margarita? Then start planning today and you’ll thank yourself when you’re in Hawaii with a nonexistent work schedule.