You can save more—a little here, a little there—for your post-work years with some thoughtful ideas tailor-made for real life.
Every day for the next 10 years, more than 11,000 people will turn 65—retirement age—in something that’s being called Peak 65. While those people won’t share the same retirement experience, many share a regret: They haven’t saved enough. In fact, more than half of them have less than $100,000 in assets.
Avoid regret. Whether your retirement is something you’re actively planning for or decades away from, you can boost your retirement savings, even if it’s just a little, even if it’s irregularly, with some real-world, real-life ideas.
1. Start saving the second you can.
There’s a saying: It’s time, not timing, that matters most when it comes to retirement savings. What does that mean? The power of dollars you put toward retirement gets supercharged the earlier in life you put them away. Why? Compounding. Here’s an example
| Saver | Kathy | Michael |
|---|---|---|
| Age of first retirement savings | 25 | 35 |
| Yearly investment | $10,000 | $10,000 |
| Investment length | 15 years | 30 years |
| Total invested | $150,000 | $300,000 |
| Total value at age 67 | $1,122,000 | $908,534 |
There are all sorts of ways you can save for retirement (more on that below) and you don’t have to wait until you have an employer-provided retirement plan. (Tip: If your kids are getting their first high school job, they can save a few hundred dollars in a traditional IRA or Roth IRA—accounts they can add to through the years, no matter where they’re employed.)
2. Prioritize an employer match; it matters quite a lot.
Nearly every company that offers a retirement plan also offers some sort of a match, according to the Plan Sponsor Council of America.
The key is to work up to saving enough to get the full match; otherwise you’re leaving money on the table. (Throw in compounding on top of the match, and you can see how quickly the benefits add up.) Here’s how a simple boost in savings plays out
| Employee | Kathy | Michael |
|---|---|---|
| Salary | $50,000 | $50,000 |
| % saved by employee | 6% | 3% |
| Match | 3% | 1.5% |
| Total yearly retirement savings | $4,500 | $2,250 |
3. Focus on gradual progress.
If most of us are worried we’re not saving enough, how much more should we be saving? It depends, of course, but about 15% is one consensus. But that doesn’t mean you have to get there all at once.
Take this example: Say you start saving 4% of a $30,000 salary at age 30 for a total of $1,200 that year. Get a 3% raise each year, increase your retirement savings by 1% each year, and in 11 years, you'll be saving at that magic goal number of 15% and a total of $6,229 each year.
And, you don’t have to get to that 15% all on your own. “Many [people] are within range of a recommended minimum savings rate of 15%
4. On a retirement savings pause? Start again as soon as you can.
Maybe you saved a little at 25 but then had to reduce your savings rate for a big event. Or perhaps a job pivot forced you to suspend saving entirely. Whatever the case, it’s helpful to remember that rarely is saving for retirement linear; life often has other plans. (Nearly two-thirds of employees have a career gap, and perhaps a retirement savings pause, on their resumes.)
5. Pay off your debt.
How is paying off debt related to saving more? Turns out debt keeps over one-third of people from putting money away for post-work years.
6. Take advantage of your plan’s auto features.
More and more employer-provided retirement plans have things like auto enrollment (you're automatically enrolled in your retirement plan at a pre-set percentage when you're hired) and auto escalation (your savings rate increases, typically by 1% each year, until you reach a recommended level) that have proven to boost retirement savings. For example, 81% of plan participants say auto enrollment helps them save sooner for retirement, and nearly all of auto enroll participants stay enrolled.
7. Save for retirement in as many ways as you can.
A 401(k). A traditional IRA. A Roth IRA. A health savings account.
Those are just four ways you can save for retirement, and having one type of account doesn’t prevent you from having another type. Each also offers its own benefit, from the post-tax advantage of a Roth to the pre-tax boost of an IRA.
Another bonus of having different types of accounts? You may be able to widen the investment offerings you save in, diversifying your risk and buffering the impact of market volatility.
8. Consolidate accounts as you can.
Technically, consolidating isn’t really increasing your retirement. But it does help you do a simple thing: Not lose accounts. There are over 29 million accounts
Once you leave a job, check your options for either keeping the money where it’s at or rolling it over either into a new or existing IRA or a new 401(k), if you’re moving to a job and the plan allows it.
9. Use gifts, tax rebates, and bonuses as a retirement boost.
Say you can’t increase your retirement savings by a percent or two one year. If you receive unexpected funds, you can put them in savings like a Roth IRA. That can help to increase your overall percent saved for that year.
10. Use catch-up retirement contributions to make up lost ground.
Once you reach age 50 and retirement feels even closer, there’s a way to ramp up savings: catch-up contributions. These are extra dollars that you can save each year once you reach age 50 and have made the maximum for your yearly contributions.
| Age | 50-59 | 60-63 | 50> |
|---|---|---|---|
| Catch-up contribution max | $7,500/year for 401(k) | $11,250/year for 401(k) | $1,000 for IRA |
11. Extend your working years.
Retirement savings doesn’t look the same from person to person, and neither does retirement. A new trend that may help people save more, as well as delay crucial retirement income benefits like Social Security, is phased retirement; it involves a gradual reduction in work hours. Younger generations including Generation X and millennials expect (and prefer) this type of approach, and employers value it as a way to retain institutional knowledge.
What’s next?
Do you know how much you’re contributing to your employer-sponsored retirement account? Log in to your account to check. First time logging in? Get started by creating an account. Don’t have an employer-sponsored retirement account? We can help you set up your own retirement savings.
