Painless Ways to Boost Your Retirement Funds

Saving for retirement doesn’t need to be a chore. Tweaking certain spending habits and paying off debt are two steps you can take to make it easier to boost your retirement funds. Using technology that allows you to automate your savings deposits is another. None of these will cost you more than a few minutes time. Getting started is simpler than you might think.

Before reviewing this simple six-step list, make a list of all your current debt and formulate a plan to eliminate it. One of the more popular strategies for doing this is called the debt snowball method, where you pay off the smallest balance first, then move down the line to the next smallest. There’s also the debt avalanche method, which puts the highest-interest rate first and works toward the lowest-interest debt.

1. Budget your expenses

It’s difficult to save when you’re spending more than you can afford. That’s how credit card balances get maxed out. Create a budget. List all your expenses and mark them as either “essential” or “non-essential.” The latter can be cut back. Weigh your expenses against your income and figure out an affordable number for your retirement savings.

2. Pay off high interest credit card debt

If you followed our advice above, you should have a list of all your debt accounts and a selected method for paying them off. This is the step where you prioritize those payments. High-interest balances are costing you money every day, so you’ll want to pay them off as quickly as possible. Use either the snowball or avalanche method — or a hybrid approach — and make extra payments when you can.

3. Automate your savings deposits

Technology is a wonderful thing. Either set your checking account to transfer funds into savings on a regular cycle or change your direct deposit settings with your employer to deposit a portion of your check directly into a savings account. While you’re at it, you can ask the payroll administrator to increase the percentage of your check that goes into your 401(k).

4. Always pay yourself first

The deposits you make into a retirement fund today will multiply over time and be worth far more by the time you withdraw them. Remember that when you’re faced with a purchase decision for something you really don’t need. If you put that purchase on a credit card, you’ll pay interest. In a retirement savings account, those same funds will make you money.

5. Take care of your credit

A good credit score is an asset. We tend to think of it as a tool to buy homes and take out loans while we’re younger, but credit is equally important in our golden years. You’ll never know when you’ll need access to financing, so pay your bills on time, keep your credit card balances low, and limit your credit inquiries. Those actions will keep your score up.

6. Remember the pandemic

We all had to make sacrifices and spend more conservatively during the 2020 coronavirus pandemic. Remember that mindset, not out of fear that it will happen again, but as a deterrent against overspending. You don’t need to be miserly, but a little frugality is not a bad thing. Save your money now, spend it when you retire. You’ll have more time to enjoy it then.

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