9 Tactics You Need to Learn to Boost Your Retirement Savings

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Without adequate retirement savings, you may have to continue working well into your golden years or rely on your loved ones for financial support.

The good news is whether you're in your 20s, 30s, or 40s, you can always take steps to boost your retirement savings and ensure a secure financial future. 

In this article, we'll share seven strategies to help you do that. By implementing these tactics, you'll increase your savings and enjoy peace of mind knowing you're taking the right steps toward securing your financial future.

1. Create a retirement plan

First, have a plan. Without a retirement plan, you’re likely to default on your contributions. Creating a retirement plan shouldn’t be challenging.

Here are simple steps to follow.

1. Determine your retirement goals. How much money do you need to retire comfortably? What kind of lifestyle do you want to lead in retirement? 
2. Next, calculate how much you need to save each month and what kind of investment returns you need to earn to reach your retirement goals.
3. If you are not contributing to a retirement account, start contributing asap. Otherwise, consider increasing your contributions. 
4. If your employer offers a retirement plan, ensure you take advantage of any employer contributions. This is free money that can boost your retirement savings.
5. Ensure your retirement savings are invested in a diversified portfolio matching your risk tolerance and retirement goals. 
6. Consider delaying retirement to give yourself more time to save and reduce the amount you need to save each year.
7. Consult with a financial advisor: A financial advisor can help create a retirement plan tailored to your needs and goals. They can also help you adjust your plan as your circumstances change.

2. Increase your sources of  income

By increasing your sources of income,  you'll not only have more money to enjoy now but also in retirement.

So, how can you increase your sources of income to boost your retirement savings?

• Get a part-time job or side hustle: Direct the extra money you earn towards retirement savings.
• Freelance work: If you have skills like writing, graphic design, or programming, consider freelancing to earn extra income. 
• Sell unused items: Sell items you no longer need or use on platforms like Facebook Marketplace. 
• Participate in the gig economy: Platforms like Uber and Lyft provide opportunities for people to earn extra income by driving people around in their spare time.

3. Contribute to a retirement plan

Contributing to a retirement plan is essential to achieving financial security in retirement. Here are three steps to help you get started:

• Identify the retirement plan options available to you.

The first step is to identify the retirement plan options available to you. If you are employed, your employer may offer a retirement or pension plan. 

You can also consider opening an Individual Retirement Account (IRA).

• Determine how much you need to contribute.

The next step is to determine how much you need to contribute. A general rule of thumb is to save 10-15% of your income for retirement.

However, the amount you need to save may vary depending on your retirement goals, lifestyle, and expected retirement expenses. 

Use retirement calculators or seek advice from a financial advisor to determine a savings goal that works for you.

• Contribute as much as possible and take advantage of your employer’s match.

Once you know how much you need to save, contribute as much as you can. If your employer offers a match, contribute at least enough to get the full match, as this is essentially free money. 

Remember,  contributing to a retirement plan reduces your taxable income so that you can save on taxes.

4. Ensure proper asset allocation

Asset allocation refers to dividing your investment portfolio among different asset classes, such as stocks, bonds, and cash, based on your investment goals, risk tolerance, and time horizon.

If you’re in your 20s or 30s, you have a longer time horizon and can tolerate more risk. However, older investors may want to shift towards a more conservative mix of investments.

Besides risk tolerance, consider the fees associated with each investment, including sales and transaction fees.

These costs can eat into your investment returns and reduce the money you have available for retirement savings.

5. Avoid withdrawing from your retirement savings

Withdrawing your retirement savings before time is tantamount to digging your own grave. Here’s why.

• You can be penalised for early withdrawals.
• You may lose some tax advantages.
• You lose the ability to benefit from the power of compound interest.
• It can lead to a smaller nest egg.

6. Consistency is key

You must make consistent contributions if you hope to retire with a healthy nest egg. 

Here are some tips to help you stay on track and consistent.

• Set a goal: A specific retirement savings goal will help you stay motivated and focused in the long term. Calculate how much you need to save and set a target for your contributions.
• Automate your contributions: Set up automatic monthly transfers from your checking account to your retirement savings account. This allows your nest egg to grow without needing effort from your side.
• Create a budget: A budget will help you manage your finances and ensure you have enough money to make regular contributions to your retirement savings. Make sure to include retirement savings as a line item in your budget.
• Take advantage of employer matching: If your employer offers a matching contribution to your retirement plan, contribute at least enough to receive the full match.

7. Pay off your loans/manage your debts

Loans and debts can derail you from achieving your retirement saving goals. So, pay off your loans and ensure your debts are under control.

Here are three ways paying off loans and managing debts can boost your retirement savings:

• Increased cash flow: You'll free up more cash flow that can be redirected towards retirement savings. 
• Reduced interest payments: You'll save on interest charges and have more money to contribute to your retirement savings.
• Avoiding penalties: By paying off these loans and managing debts responsibly, you can avoid costly penalties. As such, you’ll have more money to save for retirement.

8.  Start saving early

Time waits for no man. You need to think twice if you’re waiting to hit  40 or 50 to start working on your nest egg.

Here’s why:

• Starting early allows you to take advantage of the life-changing magic of compound interest. This means that you earn interest not only on your initial investment but also on the investment's interest.
• Life can be unpredictable, and setbacks happen. You can lose your job or source of income or become incapacitated because of ill health.  Starting early gives you more time to recover from such setbacks or losses. 
• Starting early means, you can contribute smaller amounts over a longer period to achieve your retirement goals. This can help reduce the overall burden of saving for retirement.
• When you start saving for retirement early, you can retire earlier than most people. For instance, you can retire at 40 and enjoy your golden years while still healthy and active.

Wrapping up

In conclusion, building up your retirement savings is crucial to securing a stress-free and comfortable future. Implementing the seven tactics discussed in this post can boost your savings and ensure you have enough funds to support your retirement lifestyle. 

Remember to start saving early, diversify your income sources, reduce your debt, plan for inflation and healthcare costs, and adjust your plan over time. 

By staying focused and committed to your retirement goals, you can build a solid financial foundation for your future and enjoy your retirement years with peace of mind.