5 Ways to Up Your Retirement Savings

One of the ironies about retirement planning is that the further you are away from retiring, the more you can and should be preparing for it.

But life makes it tough. People just starting to work or in the middle of their careers have many competing financial needs – mortgage or rent, kids, car, education – and those things can make retirement seem a long way off.

Whatever your age, though, you might be able to increase your retirement savings. The trick is to find money that you can divert from today’s budget that won’t be missed. Consider one of more of these five ways to up your retirement savings.

1. Put Your Raises Toward Retirement

Raises are a prime opportunity to increase your savings. Instead of getting used to spending your extra money, increase your retirement contribution. You can go online or talk to your HR person to make that happen, and to set up higher automatic withdrawals. When your savings is automatically taken out of your new, larger paycheck, you won’t get used to spending it. It’s a “set it and forget it” move.

2. Automatically Escalate Your Contributions

Going from saving nothing to putting away 10% or more of your paycheck might be a shock. So, start saving whatever amount you can, and then each year increase by 1 or 2% of your salary. You’ll barely notice the impact of those small increases and you’ll eventually work up to your target savings rate (ideally at least enough to get your employer match).

3. Consolidate Debt and Shift Surplus Into Retirement

Debt consolidation can free up extra money by saving you interest and reducing monthly expenses. Think of all the payments you make for credit cards, car loans and other personal loans. All those monthly payments can add up. Consolidating them all into one loan could get you a lower interest rate, freeing up funds to save for retirement. Plus, there’s the added benefit of only having one payment a month instead of keeping track of multiple payments.

4. Have Your Retirement Contributions Automatically Deducted By Your Employer

You won’t miss what you don’t see. Employer-sponsored retirement plans are great because the money comes out automatically, so you never have to consciously move it around yourself. You get used to living without it. If you have a non-401(k) type of account, like an IRA, you may be able to have your employer direct money into that account in a similar way.

5. Revisit Your Tax Withholdings

Look at your W-4. That’s the form you use to calculate tax withholdings from your paycheck. If you regularly get a big refund at tax rime, that probably means you are withholding more than you need. Setting your withholdings to a more appropriate level can free up funds you can contribute to retirement.

A Financial Advisor Can Help

Some of these tips are easy, and some take a little more know-how. The important thing is to get started. An experienced advisor from Servion Financial Advisors (SFA) can help you analyze your personal situation and help you take steps toward enjoying financial security today and in retirement.

Talk to your credit union staff about getting connected with our trusted Servion team or visit the SFA website for more information!

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