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As such, it’s imperative that you take steps to catch up on retirement savings if you’re currently behind, regardless of age. Here are a few ways to do just that.
1. Boost your income to allow for higher retirement plan contributions
If you’re an average wage-earner, you may have a hard time parting with a lot of money to put into your 401(k) or IRA. But if you’re willing to do a little work on the side, you’ll have a dedicated income stream you can use to fund your retirement savings. Think about a side gig you can take on that works for your schedule and lifestyle, and commit to doing it a few hours a week as a start, with the goal of working your way up. If you manage to earn $100 a week from that gig on average, you’ll have a chance to sock away over $5,000 a year for retirement.
2. Bank your raises every year
It’s natural to look at a raise and start making plans to spend that money. But if you instead earmark that extra income for retirement, you won’t actually miss it. Even if you don’t manage to part with additional money from your current earnings, if your salary goes up by $2,000 next year and you allocate all of it to your 401(k), that’ll still bring you closer to your savings goal.
3. Compensate with a strong investment strategy
To be clear, investing wisely should not, and cannot, take the place of consistently funding a retirement plan. Rather, you need to do both to increase your chances of ending your career with enough money to cover your expenses during your senior years. But if you’re unable to do much to ramp up your 401(k) or IRA contributions right now, you can, at the very least, invest that money in a manner that fuels its growth. If you’re seven years away from retirement or more, that means loading up on stocks, which typically offer much higher returns than bonds.
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