Saving for retirement can seem like an enormous task, especially when you fall behind. The temptation can be to take on additional risk to make up the difference. However, instead of betting on higher returns, it is better to control the things you can have an impact on. Here are some of the best strategies for ensuring you have enough in retirement.
The easiest money you will ever make is by making sure to get the company match as part of your retirement benefits. Always make sure and max out whatever your company is willing to match. This is the equivalent of getting a 100% return on the first day you invest, something that you will never find anywhere else.
Sign up for Automatic Annual Increases
One of the most successful strategies for increasing your savings is to have it done automatically. Some plans allow you to take a portion of any raise and contribute it to your retirement account. Check out more on this topic here.
Consider Working Longer
This might be a tougher strategy to swallow but also incredibly impactful. Working longer can dramatically change your probability of success in retirement. This doesn’t mean you have to stay in your current job, but if you continue working in some kind of capacity it will pay major dividends towards your retirement goal. It also allows you to wait on Social Security which leads to the next strategy.
Wait on Social Security
While it is tempting to take Social Security as early as possible, be careful you understand what you are doing. Full retirement age is not until 66-67 (depending on when you were born) and there is a significant reduction in your benefit for taking it early. Each year you wait is typically about an 8% increase plus there is an inflation adjustment on your benefit going forward as well. This can make retirement significantly easier going forward.
These are just a few basic strategies to help make up for lost time. One of the most important things is to not give up or even worse, gamble to make up the difference. If you need help pulling together a strategy to make sure you can meet your goals, please feel free to reach out to one of our advisors.