Whether you’re trying to catch up on savings or want to pad your existing retirement funds, there are still many ways to do so. Even better is that you can still save in your 50s and 60s. Ready to max out your contributions and grow your nest egg? Here are five strategies to take.
If your employer matches part of your 401(k), make sure you contribute enough to qualify for whatever match they provide every year. If you aren’t utilizing your employer match, you’re essentially throwing money away, and it’s money you won’t be able to get back.
Different types of retirement accounts have different advantages. Depending on your financial situation, you can fully or partially deduct your contributions to a traditional IRA. This means the government won’t tax you on these contributions until they’re distributed. Roth IRAs, on the other hand, are funded after tax. This means the government won’t tax you again when you withdraw funds. Both have their merits, but ultimately you’ll have to weigh those against your expected financial situation to figure out what’s right for you.
If your employer offers a High Deductible Health Plan, you may be eligible to start a health savings account. HSAs help you pay immediate healthcare expenses. However, if you accumulate money over time, those funds can be used alongside your retirement savings. Healthcare costs go up as we get older, and as long as your HSA is used for healthcare expenses, this is a great supplement for your retirement, especially because distributions are tax-free.
If you regret not saving more for retirement in your younger years, adults 50 and older can contribute an extra $6,000 above the 401(k) limit and an extra $1,000 above the IRA limit. These tax savings can help you make up for lost time, so take advantage if you’ve missed them.
How much you need for retirement will depend on your income goals, investment returns, and many other factors. Using online retirement calculators can give you a rough estimation of how much you’ll need to save.