About 64% of Americans are expected to retire with less than $10,000 in savings, according to a GOBankingRates 2019 retirement survey. With so many Americans retiring broke, it’s important to ensure that you’re safeguarding your retirement and saving as much as you can. So, if you’re trying to increase your retirement savings, consider these four ways to help you save more money in your 401K.
MEET THE FULL-EMPLOYER MATCH
Many companies offer 401(k) matching contributions. This means that they will deposit money in your 401(k) account to match your contributions up to a specific amount. Depending on the type of plan your company offers, an employer may decide to match your contributions dollar-for-dollar or provide a partial match.
Therefore, by contributing enough to meet the match, you’re essentially receiving free money. For example, let’s say your company matches your contributions up to 3%. If you contribute 3% of your salary and accumulate a 401(k) savings of $42,000 throughout your career, your savings will double because your employer is contributing just as much. So, instead of having $42,000 saved for retirement, you have $84,000 (assuming the account doesn’t accumulate interest).
If you’re not contributing enough to get your company’s full match, you are leaving retirement savings on the table. So, make sure to increase your contributions so you can meet the full match.
USE YOUR BONUS AND RAISE
Whether you’re expecting an annual raise or a quarterly bonus, it’s wise to use it to directly contribute to your 401(k). Since it’s additional income, you probably aren’t counting on it to pay your bills. Therefore, if you use the money to contribute to your 401(k), you may not miss the extra funds.
The more you can continually increase your contributions to your retirement savings, the larger nest egg you’ll be able to amass. This may make you feel more secure as you head into your golden years.
START A SIDE GIG
One of the biggest reasons people don’t prioritize saving for retirement is that they feel they don’t make enough money to cover their expenses. To combat this obstacle, you may want to try starting a side hustle. Almost half of Americans (45%) report having a side hustle in addition to their primary job. The extra cash allows them to support their families and increase their disposable income.
If you find you don’t have enough money to contribute to your 401(k), you could use the money you receive from your side hustle to start increasing your contribution to your retirement fund. So, whether you want to teach music lessons a few days a week or build furniture out of your garage, there are plenty of ways you can start making extra cash.
Sometimes all you need to do to save more in your 401(k) is reorganize your budget. Just because you don’t think there is enough room in your budget to contribute to a 401(k) doesn’t mean that you can’t move things around to create room for contributions. By cutting back on some of your spending habits or eliminating certain expenses, you may be able to increase the amount you contribute to your savings.
For example, if you have cable and every streaming subscription service available, you may decide it’s wise to eliminate your cable bill. By eliminating this expense, you may save yourself an extra $100 per month, which you can then contribute to your 401(k) savings. Finding little ways to cut back can help you figure out how to contribute more toward your savings.
THE BOTTOM LINE
If you have access to a 401(k), you should start by contributing as much as your employer will match. Then, you can make incremental increases to your contributions, and find space in your budget to contribute more to your retirement savings. Contributing to your 401(k) will help to set you up for a secure retirement.