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Ways to Increase Your Retirement Savings

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Ways to Increase Your Retirement Savings

Consider the following to help boost your retirement savings.

Start Today

Start saving and investing as much as you can now. Compound interest can help your initial investment grow exponentially with reinvestment of earnings and time on your side. Therefore, it’s important to start investing as early as possible.

Meet Your Employer's Match

If your employer offers to match your retirement plan, try to contribute enough to take advantage of the match. This is free money that is added to your retirement account on top of what you already contribute. 

Take Advantage Of Catch-Up Contributions​

If you are age 50 or older, you can increase more than the normal contribution limits. So, if you didn’t contribute as much as you would have liked earlier on, now is the time to use catch-up contributions to help boost your retirement savings. 

 

For 2019, the catch-up contribution limit if you are 50 or older will remain at $6,000.¹ 

Stop Excessive Spending

The end of the year is the perfect time to look at where your money went earlier this year. Look at your budget to see which purchases added up, like daily stops at coffee shops or eating out frequently. You may be shocked by just how much your household spent. 

 

One Pew study found that 46% of Americans spend more than they make every month. Look at your budget to help from doing the same. You may find money that is better suited to boost your emergency fund and retirement savings.² 

Set a Goal

It’s important to know exactly how much you will need to retire. This shows your saving and investing efforts have an end reward.

 

At ProNvest, participants can utilize the ProNvest Retirement Planner, an online questionnaire, designed to determine how much money they’ll need to retire, how prepared they are today and what steps they can take to reach your goals.

Delay Social Security

If you start your Social Security benefits early, they will be reduced based on the number of months you receive benefits before you reach your full retirement age. If your:

 

Full retirement age is 66, the reduction of your benefits at age 62 is 25 percent; at 63, it is about 20 percent; at age 64, it is about 13.3 percent; and at age 65, it is about 6.7 percent.³ 

 

Full retirement age is older than 66 (that is, you were born after 1954), you can still start your retirement benefits at 62 but the reduction in your benefit amount will be greater, up to a maximum of 30 percent at age 62 for people born in 1960 and later.³

Don't Borrow From Your Retirement Account

If you are facing a financial concern, you may be tempted to take money from your retirement account. However, borrowing money defeats the purpose of a retirement account, which is to provide your future-self financial security in your golden years. If you decide to borrow, you will be charged added interest and fees. Additionally, you are taking away vital money that would have otherwise grown with the power of compounding. 

 

Instead, work on building a sturdy emergency fund to cover three to six months worth of expenses to serve as a buffer to financial emergencies that may come along in life. 

Don’t regret starting too late or saving too little. Act today to help make your retirement something to look forward to and protect your future-self against the danger of a declining standard of living. 

Brought to you by

www.pronvest.com

Citations. 

1 – https://thefinancebuff.com/401k-403b-ira-contribution-limits.html

2  https://www.marketwatch.com/story/postrecession-this-is-what-americans-are-really-spending-their-money-on-2017-12-13

3 – https://www.ssa.gov/planners/retire/applying2.html

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