4 Smart Strategies to Boost Your Retirement Savings

4 Smart Strategies to Boost Your Retirement Savings

I read an article from Jeff Bloomquit our Financial Advisor, and I wrote a summary.

Envision your dream retirement: Where do you picture yourself? How will you spend your days? And importantly, how much will it cost to live that dream? Are you on the right path to make it a reality?

With thoughtful planning and personalized financial advice, achieving your retirement goals is within reach. Here are four ways to help you maximize your retirement savings:

1. Maximize Contributions to Your Employer’s Retirement Plan

If your employer offers a 401(k) with a matching contribution, take full advantage by contributing at least enough to receive the full match. These contributions are taken from your paycheck pre-tax, which reduces your taxable income, and your investment grows tax-deferred over time.

If you can, aim to contribute the maximum allowed. For 2024, this limit is $23,000, and if you’re over 50, you can make an additional $7,500 in catch-up contributions.

2. Invest in a Roth IRA or Traditional IRA

A 401(k) alone may not be enough to secure your retirement. To boost your savings further, consider investing in an Individual Retirement Account (IRA).

You can choose between a Roth IRA and a traditional IRA:

• Roth IRA: Contributions are made with post-tax dollars, earnings grow tax-free, and qualified withdrawals are typically tax-free. Roth IRAs also do not require minimum distributions (RMDs), offering flexibility in managing withdrawals.

• Traditional IRA: Contributions are made pre-tax, earnings grow tax-deferred, and withdrawals are taxed as ordinary income. Traditional IRAs are subject to RMDs starting at age 73, but there are no income limits for contributions.

In 2024, you can contribute up to $7,000 annually to an IRA if you’re under 50, and up to $8,000 if you’re 50 or older.

3. Open a Health Savings Account (HSA)

An HSA is not just for healthcare—it can be a valuable tool for retirement planning. If you have a high-deductible health insurance plan, you may qualify to open an HSA, which offers three significant tax advantages:

• Contributions are pre-tax, lowering your taxable income.
• Earnings grow tax-deferred.
• Withdrawals for qualified medical expenses are tax-free.

After age 65, HSA funds can be used for non-medical expenses (though these withdrawals will be taxed). For 2024, HSA contribution limits are $4,150 for individuals and $8,300 for families.

4. Consider Retirement Plans for Self-Employment or Freelance Income

If you’re self-employed or earning freelance income, you have additional retirement savings options like a SIMPLE IRA, SEP IRA, or solo 401(k). These plans can be especially beneficial if you already contribute to an employer-sponsored 401(k).

Before maximizing contributions to both an employer 401(k) and a self-employed retirement plan, be sure to review IRS contribution limits to avoid exceeding them.

Secure the Retirement You Deserve

Achieving your retirement dreams starts with a solid plan. Whether your circumstances change or your goals shift, having a clear strategy in place can help you stay on track. With personalized financial advice, you can take proactive steps to maximize your savings and ensure that your retirement vision comes to life.