Imagine your best retirement: 4 tips to maximize your savings
You may have multiple savings goals and as your priorities change, it is good to know how best to save for the things that matter most, without sacrificing your own financial future. Here are four tips to help you maximize your retirement savings.
Imagine your best retirement and then save
When you think of retiring, what do you imagine? Most of us, whatever we envision, likely want to maintain our current lifestyle. To achieve this, think about maximizing your savings efforts to meet your income needs.
Now that you have a vision for retirement, it is a good idea to calculate your future retirement income and the expenses not often considered when planning. So how much saved income should you have by retirement? While everyone’s personal needs are unique, the accepted standard within the financial industry is to consider your income goal to be equal to 70% of your current salary. The salary question is required the first time you use myOrangeMoney®, an online interactive educational experience so you can know your number. You will also want to consider Social Security and health care costs, which are included in myOrangeMoney calculations. And be sure to include supplemental Medicare insurance with the inevitable cost of living increases to determine a future income that is right for you.
Give yourself a boost – kick up your retirement savings
When you think about maximizing your retirement savings, what does that mean to you? It can mean maxing out the annual IRS limits on each of your retirement savings accounts, which means this year, you have a chance to save an additional $500 over previous years. For 2018, the contribution limit increased to $18,500 for a retirement account and more for IRA accounts, learn more here. It can also mean maximizing any employer’s retirement plan benefits such as a match program if available to you.
For example, some employers match dollar-for-dollar up to a certain percentage of your salary. If your employer extends a retirement savings plan such as a 401(k) and you are eligible to participate, but not enrolled, take advantage of the tax benefits and savings growth potential and sign up today. If you already participate within an employer retirement plan, ask if they match your contributions. Be sure to take advantage of the entire match to give yourself a boost – and kick up your retirement savings.
Play catch-up with your contributions
If you are 50-years or older, another way to maximize your retirement savings is to take advantage of catch-up contributions beyond the $18,500 maximum allowed for your 401(k). Fifty-somethings can also contribute an additional $6,500 dollars to an IRA within the same year; the amount has increased from years prior, to give you more savings power.
Get guidance for the financial road ahead
Your financial journey begins with you. You have goals and you want to save. Learn how working with a financial advisor can help you start and stay on track. An advisor can give you a better understanding of how everything works together making the most of what you have – so you have more for your road ahead.
Remember, building savings takes time. As you look for more ways to maximize your retirement savings, be sure to budget for all of your competing savings goals. Save early and save often, so you can provide for your loved ones, and live the life you’ve envisioned.
How Much Do Retirees Actually Spend?
Save more this year with 2018 contribution limit increases, December 2017