In a perfect world, everyone would start saving for retirement their first day on the job. In that hypothetical utopia, all workers would max out their retirement funds, and there would be no worries about falling short or running out of money. In the real world, however, saving for retirement is not that easy.
If your retirement saving has gotten off to a late start, you have plenty of company. Getting a late start on saving for retirement is not ideal, but it’s not the end of the world either. Here are some smart strategies you can use to make up for lost time and still enjoy a financially secure retirement.
Build a Better Budget
It’s easy to forgo retirement savings when you don’t have any extra money. If you’ve been using a lack of money as an excuse for putting off retirement savings, it’s time to take a hard look at your budget. You could find the money you need by building a better budget, jump-starting your retirement savings and improving your financial situation over time.
Start by looking at categories like dining out, entertainment, clothing, gym memberships, and cable television. Ask yourself how much you could save by eating at home more often or switching to a less expensive cable package. Keep in mind that the sooner you start saving, the less you will need to save each month, so squeezing your budget tighter now could pay off big later.
Use Tax Savings to Boost Your Retirement Savings
One of the most significant advantages of saving for retirement, aside from future financial security, is the immediate tax savings. When you stash money in your 401(k) plan at work or contribute to a deductible IRA account, you enjoy lower taxes now and tax deferment for years to come.
If you are looking for a way to boost your retirement savings, then grab your calculator and see how much you can save on taxes. Then use those tax savings to finance your retirement plan contributions. As the savings accumulate, you can use the extra funds to boost your retirement savings further, creating a virtuous cycle that will last all the way to your post-work years.
Increase Your Income With a Side Hustle
If you’re still having trouble saving for retirement, you may want to boost your income with a side hustle. Thanks to the power of the internet, there are more ways to make extra money than ever before, all without the commitment of a part-time job.
You can dedicate the money you make from your side hustle to boost your retirement savings. Even if you make just $500 a month, that is enough to fund your IRA account fully, and the more you earn, the more you can save.
Delay Your Retirement
It is not always easy to make up for lost time when saving for retirement. If you got off to a late start or made some mistakes along the way, the best solution could be working a few more years than you intended.
Working past your original retirement age will give you extra time to boost your savings, but it will also delay the withdrawals from your retirement funds. Instead of pulling from your IRA or 401(k), you can keep contributing. When you are finally ready to retire, you can enjoy greater financial security and a better lifestyle, and that is well worth a few extra years in the workforce.
When armed with the power of hindsight, it’s easy to see the value of starting early and socking money away from day one. Even so, few workers heed the call, and they find themselves left behind and struggling to keep up. If you are ready to make up for lost time, the strategies listed above can help you boost your retirement savings, so you can truly enjoy your golden years.