- Maximize Your Benefits with Your Company Match
If you work for a company that offers matching for contributions to a 401K plan, make sure you are getting the full benefit of your match. Many people put certain percentages of their income in their retirement savings but not enough to get their full company match. Remember, a company match is free money. It’s likely worthwhile to cut back in other areas of your life (maybe eating out or other small luxuries) in order to ensure you get as much of that free money as possible. If you aren’t sure of your company policies, ask your manager or human resources department and find out as much as you can until you fully understand how your matching policy and vesting schedule work. After all, no one cares more about your money than you.
- Set It and Forget It with Automatic Deposits
Perhaps the best way to save for retirement is to do it without thinking about it. If you wait until the end of the month to save whatever you have left over after bills and expenses, you may never have enough. The best strategy is to pay yourself first, and you can do this by setting up automatic deposits to your retirement account whenever you get your paycheck.
Whether you do this through your employer or your own separate brokerage account, automatic payments can help build your retirement savings even if it’s just $100 per month.
Do your homework before you decide how much to invest each month. You can do your own research, take advantage of a retirement calculator, or speak with a financial advisor to find out how much you should save to reach your goal.
- Don’t Be Tempted By Windfalls — Keep Investing
Many people look forward to receiving their tax refund every year, but most people don’t look forward to the windfall so they can invest it. Instead, they use it for family trips, big screen TVs, or other indulgences. While you can use your refunds, financial gifts, inheritance, or other unexpected bonuses and checks for whatever you want, consider using it to increase your retirement savings especially if you’re worried you don’t have enough saved for your future.
If you don’t want to move all your unexpected windfalls to your retirement savings, you can also divide them, using some for spending, some for saving, and some for giving. Either way, your future self will thank you for taking the time to save toward your retirement whenever you had the chance.
Ultimately, there are many ways to optimize and increase your retirement savings throughout your life, and as long as you make it a priority to consistently invest over the course of your working life and beyond, you should be well on your way to building a savings that you can enjoy throughout your retirement years.