5 Tips to Increase Your Retirement Savings
According to the Employee Benefit Research Institute's 2010 Retirement Confidence Survey, about 70 percent of current workers plan to work for pay during retirement. So chances are, you're looking to increase your retirement savings as much as you can now, so you don't have to work more later.
One way to ease your concern about your savings rate is to check your numbers against a retirement calculator.
Regardless of your age, you can reduce your expenses and contribute the extra cash to your retirement account.
Cut costs to boost retirement savings
Try these five ways to reduce your expenses and increase your retirement savings.
- Pay off expensive debt. While it may seem as if you are not contributing to your retirement savings if you are using much of your income to get out of debt, this is actually one of the best moves you can make toward your future financial stability. If you pay down (or pay off) your credit card debt and make extra payments toward your mortgage, you may be able to retire debt-free or at least require less income to meet your expenses.
- Compare investment fees. Check to make sure you are on track to meet your investment goals without overpaying in management fees.
- Evaluate your housing costs. Depending on your circumstances, you may be paying more than you should for your home. Consider downsizing and investing the extra money you have for retirement savings.
- Compare earnings on your savings. If you are keeping more than six to nine months' of expenses in a money market account or certificate of deposit, or CD, you may want to move some of that cash into an investment with the potential for a higher rate of return. For your emergency savings, compare money market and CD interest rates at Bankrate to see if you are earning the maximum interest.
- Try a "no-spending" month. It can be challenging to eliminate all unnecessary spending for 30 days, including restaurant meals and gifts, but this method can provide a quick boost to your retirement savings.
Regardless of which method works for you, the important message is to make retirement savings your priority.