6 Ways to Stay on Track with Your Retirement Savings

Create a Savings Mindset | DataDrivenInvestor

If you’re like most people, your retirement savings have probably lagged where they need to be. Fortunately, there are many ways to get yourself back on track. According to a study by the National Association of Financial Advisors, the typical adult has less than half of what they need for their ideal retirement.

Luckily, investing in retirement is not as difficult as it seems. It just takes a little planning and discipline.

Here are 6 helpful tips on how you can stay on track with your retirement savings.

1) Track Your Financial Progress

If you do nothing else to stay on track with your retirement savings, make sure you’re tracking the progress of your savings. This will help you stay accountable and be more diligent with your savings. One good way to ensure you’re tracking your progress is to keep a journal.

You could either use a notebook or create a digital journal on your computer. Journaling allows you to keep track of everything that’s going on in your life and your financial life. It also helps you stay on track because you’re more likely to focus on your goal if you’ve got a visual reminder of what your goal looks like.

Another way to track your progress is to take a look at your bank account. The easiest way to do this is by logging into your online bank account and looking at your transaction history. You might also be able to find your transaction history in your monthly statement.

2) Increase Your Invested Amount

The average American has less than $30,000 set aside for their retirement. While you can’t turn back the clock, it’s crucial to try to increase your savings as soon as possible. One way to do this is to start saving more.

Even if you only increase your monthly contribution by $10 a month, that’s $360 a year that you’re saving. If you’re in your mid-30s and have around 20 years to retirement, that’s a savings of around $400,000.

That’s a huge sum that could significantly boost your retirement savings. Another way to increase your invested amount is to increase how much you’re investing. Different types of investments hold different rates of return. If you’re investing in a traditional 401(k) or a traditional IRA, you’re probably getting a lower rate of return than you’d like.

If you’re investing in a Roth IRA, on the other hand, you could significantly boost your retirement savings.

3) Take advantage of workplace investing

If you’re eligible for a company retirement account, or if you have access to a company stock option plan, you should take advantage of these opportunities.

The benefits of participating in a company retirement plan, or a company stock option plan, include:

– You’re automatically enrolled in the plan

– No action on your part is required.

– You get an employer match, which increases the amount of money that’s contributed to your plan – This is a fantastic way to boost your retirement savings.

– You can sell your company shares and use the funds to purchase stocks and fund other investments

– This might be a good way to boost your retirement savings if you’re in a lower tax bracket now and want to save more.

– It’s tax-free, so it’s a great way to lower your taxable income.

– You can take advantage of a company retirement plan even if you’re a part-time worker.

– Can get your qualifications for a company pension if you’re in your 50s or 60s.

4) Consider a Self-Employed IRA

If your retirement savings have fallen behind, a self-employed IRA could be a great option. A self-employed IRA is a special type of investment account that’s especially beneficial for self-employed people.

What makes it a great option is that it’s treated as an IRA, which means that you can exclude up to $5,000 of retirement savings from taxation. Self-employed people also have one other advantage when it comes to retirement savings: self-employment retirement accounts are also eligible for a 25% employer tax deduction.

This means that you could contribute $25,000 to your retirement savings with a self-employed retirement account and your employer’s tax deduction would come to $50,000.

5) Assign a Fixed Amount to your Account Every month

Most people start with the thought that they’ll just put whatever amount they can into their retirement savings. Inevitably, though, you’ll find that you have a hard time making ends meet. This could lead you to try to make ends meet with less money and be in a much worse financial position than you were before.

When this happens, the best thing that you can do to stay on track with your retirement savings is to take a step back and reassess the situation. This could mean allocating a certain amount to your retirement savings every month, regardless of how much money you have. Doing this will ensure that you’re always on track and have enough money to get by.

6) Be smart with your investments

The most important thing when it comes to your retirement savings is to stay disciplined. This means not only saving money but also means investing wisely. Investing is important because it allows you to create a safe and predictable source of income for when you retire.

While there are a ton of ways in which you could potentially invest, there are a few that are typically best for retirement savings. The most common type of investment is a stock. Stocks usually come with some risk, but they can also be very profitable if you know how to invest properly. Another type of investment that’s commonly used is a bond.

A bond is a loan that you make to a government agency such as the Federal Reserve. It works like a loan and is typically a very safe investment.