Step Up the 401(k)
Most companies offer a matching contribution of up to three percent to your 401(k). If you aren’t taking advantage of this now, you may want to. Once you have established this for a year, consider raising your percentage by 1 percent, every other year or so. By increasing it at a slow rate, it’s unlikely that you will really notice it month to month, but you’ll love seeing your account grow year over year.
Don’t Cash Out
When switching to a new job, many people cash out their retirement policies. However, this can be damaging to your retirement portfolio and leave you with much less money. Consider rolling over these funds into an IRA or if possible, directly roll it over into your next employer’s plan. If you want to learn more about this option, feel free to reach out to an AbbyBank Personal Banker.
Play Catch Up
If you are age 50 or more, you can participate in what is called “catch up contributions.” The IRA catch up contribution amount for 2019 and 2020 is $1,000. Your employer sponsored plan may also allow for catch up contributions. Ask your Human Resource Department if you are unsure. These contributions can make a significant difference when you are getting close to retirement age.
Don’t Spend Bonuses
It’s tempting to go and celebrate a big bonus or raise with a big purchase. However, the smart thing to do is to pretend that it never happened and invest it into your retirement account. Whatever you want to use that money for now, you’ll be able to do even more with it later. The practice of delayed gratification is tough but worth it.
Cut Something Out
Think of a luxury item that you use every day. Maybe it’s something small that you don’t think twice about. Consider cutting it out and using the money you’ve been putting towards it for something in the future, like your golden years.
You can reach your retirement goals by staying focused throughout your earning lifetime. Contact an AbbyBank Personal Banker today!