A big retirement fund can help you enjoy the golden years of your life to the fullest. Leading a financially disciplined life can help you save a bulk amount for your retirement years. Other than that, you'll have to save as much as you can in your prime years. Read along to get acquainted with some other interesting tips and strategies that can help you boost your retirement savings.
Tips to increase your retirement savings
Here are the 5 interesting tips that can help you increase your retirement savings and remain financially fit:
1. Compute the required retirement income: You need to make a proper estimation of the amount you'll need to lead a comfortable life post retirement. The estimated retirement income should cover your daily and other necessary expenses. Then calculate the amount you'll get from the Social Security benefits. Thereafter, subtract the amount you will receive from the Social Security benefits from the required retirement income. The resulting amount will have to come from your retirement funds.
2. Make extra contributions: If you are in your 40's, then the maximum amount you can contribute to the retirement accounts (traditional and Roth IRA) is $5000. However, if you have already crossed 50, then you can make an extra contribution of around $1000. You also get a chance of contributing an extra $5500 to the accounts in this year. You can take advantage of this chance if your employer-sponsored plan allows it.
3. Find out other ways of earning dollars: You can start a home based business and contribute your earnings into another retirement account. You can use the money earned from business to contribute to IRA account. This will help you your boost your retirement savings. However, you may loose the tax benefits of the IRA plan because of your extra income.
If you are a single tax filer with an employer sponsored plan, then you'll lose tax deduction benefits under the following circumstances:
- Your gross annual income is $56,000. In this case, you may qualify for partial tax deduction benefits.
- Your gross yearly income is $66,000. You won't qualify for any tax deduction benefits.
There are other retirement plans apart from IRA. Some of them are single 401 (k) and SEP plan. These plans come with tax favorable benefits as well. So, you can take advantage of these plans as well.
4. Save more and spend less: You need to set your priorities. You'll have to decide whether or not you want to enjoy the short-term pleasures or secure your after retirement years. If you choose the latter, then you'll have to reduce your present expenses. You may have to trim down your vacation budget. Other than that, you'll have to save money on your daily expenses as well. Contribute your saved money to the retirement accounts.
5. Visit the financial adviser's office: An experienced financial adviser can help you develop a plan to achieve your desired retirement income. For instance, your desired retirement income is $450,000. However, it will be impossible for you to achieve this mammoth figure without an effective plan. The adviser will evaluate your income and tell you the ways to achieve your goal.
You can invest your money to purchase the stocks of the good companies. Retain these stocks for several years. This will help you get a good return of money after a long period of time. You can use this money to escalate your retirement funds.