How to Increase Your Retirement Savings

Protect Your Retirement Savings for Your Future

     

     Saving for the future and planning for retirement can be really scary. You may feel frozen and unable to do everything you want to improve your situation. However, leveraging simple financial tips today such as: automating your savings, cutting current expenses, and increasing your savings can add significantly to your sense of future security.

Here are some ways to increase your savings in the final stages, to ensure your retirement is the world you dream of.

Estimate How Much You Need in Retirement

Roughly estimate how much money you will need to live in retirement. Don't get bogged down with conflicting advice on how to calculate the numbers.

Consider using a retirement calculator to help you determine how much you should be willing to spend.

Set goals

Knowing how much you need can not only make the process of saving and investing easier, it can also make it more rewarding.

Set benchmarks along the way, and have satisfaction as you pursue your retirement goals. Use a retirement calculator to help determine at what age you might be able to retire, and how much money you will need to invest and save to do so.

Focus from today

Especially if you're just starting to put money away for retirement, start saving and investing as much as you can now, and let the compound interest do the talking, your assets can generate income, which you reinvest to generate your own income, have the opportunity to work your way. The more you can invest when you're younger, the better.

Automate your investments. 

Let all your investments automatically come out of your check, so you never even see them. These tips will help you avoid being tempted by the many desires that money can fulfill.

If you've always moved your retirement investments manually, you may hear a part of your brain whisper that this cash would be better used to outfit a home theater or take an exotic vacation.

We're not saying you can't save for the fun things in life. We're saying you shouldn't whittle away at your retirement savings for the fun stuff. Automatic debits can take that temptation out of the equation altogether.

Set up an emergency fund

It's one of the best ways to protect your nest egg during retirement. Financial experts recommend that by the time you retire, that you have at least 12 to 18 months of money saved for emergencies.

A good place to start is to try to anticipate possible unforeseen expenses, for example: your house may need a new roof in 10 years. Prepare and save for these expenses now, so your mind will be easier.

This is a good time to consider moving funds to a high-yield savings account, which often offers better interest rates and no fees.

Consider Relocation or Downsizing

If you live in an area with a high cost of living, moving to a less expensive area, and investing your savings for retirement can make a big difference in your ability to put together a good nest of eggs.

If your kids have left the nest and you're still living in your big, valuable house, consider selling it and buying a smaller, less expensive house.

You will save not only on your mortgage payment, but also on items like heating, cooling, insurance, home repairs, property taxes, etc.

You can put all your savings aside for retirement or use some of them. to enjoy your life now.

Pay off the rest of your debt

Managing debt prior to retirement is one of the best things you can do for yourself.

Credit card debt is a good place to start because interest rates can be high.

If you can't pay off everything right now, consider contacting your credit card company to see if you can negotiate a lower interest rate.

If you have a good history of payments, and you've worked for the same company for a long time, they might consider it.

Mortgage debt, big debt, for most people, is a good bet to deal with next.

Refinancing or paying off your mortgage before retirement can help you save a lot of money in interest, and free up those funds to save instead.

Choose wisely

When you retire, you must make certain decisions that will affect your retirement position. Depending on your retirement fund, you may be allowed to take all of your money in cash or only one-third in cash.

Sanlam's pension benchmark survey shows that many retirees drain their savings in just 2.42 years! Since retirement savings are meant to cover your needs for the rest of your life, it is very important to think carefully about how much to take out in cash.

Another important decision is selecting the right type of retirement financial product, as this can determine how your retirement income will grow over time.

Discuss this with a financial advisor. The best way to increase your limited retirement fund is to work and save as long as you can. However, companies have rules and it isn't always possible to postpone your retirement. At a certain age you must leave.

How do You Know if You're Saving Enough?

You can't. It's hard to know how long you want to work, how long you can physically work, how long employers are willing to let you work for them, how much money you actually want to spend when you retire, and how long you'll be alive when you're done.

Given all the variables, it may be tempting to give up and put off deciding whether to start saving or increase your savings. Please don't. If the odds seem tough, save as much money as you can. Again, more savings now will mean more better choices later.

Other Ways to Save for Retirement 

Retirement is one of the tax-efficient ways to save for your retirement, there are also long-term, tax-saving savings options. A long-term savings plan may also be right for you if you're worried about putting all your retirement eggs in one basket.

It can run alongside a retirement plan, and whether you use this extra pot to increase your income, treat yourself to a special vacation, or just provide an emergency fund. That could be a useful pot of money. This plan may provide a solution if you haven't yet secured a retirement plan and are looking for an affordable alternative.

Retirement Savings Since the COVID-19 Pandemic 

Statista.com reports that the COVID-19 pandemic has impacted retirement savings in a number of ways, such as lowering interest rates, decreasing the value of retirement savings account assets, losing a job followed by a decreased ability to contribute. Even before the crisis, a large proportion of the US adult population had no retirement savings or relatively low savings. After the outbreak, 18 percent said they had experienced a decrease in retirement savings, compared to before the pandemic. Most also expressed diminished confidence in their ability to retire comfortably than before the coronavirus outbreak.

Summary

Retirement can seem like a tomorrow's problem. But that kind of thinking will make you work hard for your money—for the rest of your life. Saving properly for retirement now is setting you on the path to golden years of glory. You can increase your investments and make retirement savings a feasible priority. Simply follow these tips.