No matter where you are on your financial journey, it’s always the right time to supercharge your retirement savings. Whether you’re managing multiple income streams or navigating career changes, these strategies will help set you up for a secure financial future:
1. Max Out Your Contributions: Unlock Free Money
First things first: if your employer offers a 401(k) match, you have to take advantage of it. This is as close to free money as you’ll ever get in your financial life. Every dollar you don’t contribute up to your company’s match is money left on the table—money that could be compounding into significant savings.
Beyond the match, aim for the annual IRS contribution limit. Why? Not only are you setting aside pre-tax dollars, but you’re also allowing those savings to grow in a tax-deferred account, which can multiply your wealth over the decades. For those over 50, don’t forget about catch-up contributions! This is your chance to sock away more and enjoy the magic of compounding.
Imagine this: a modest $100 increase in monthly contributions could balloon into tens of thousands of dollars over 20-30 years. It’s like planting a tiny seed today and watching it grow into a giant tree that will shelter your retirement savings!
2. Gradually Increase Your Contributions: Small Steps, Massive Payoff
It might seem hard to increase contributions in the short term but think of it like this: a tiny bump in your savings rate could lead to huge long-term benefits. Start by increasing your contributions by 1% each year. You won’t feel the pinch in your budget, but you will see it compound over time. Use our 401(k) contribution calculator to help you determine exactly how much you should be contributing to your accounts to reach your goals.
Here’s why this works so well: by incrementally increasing your contributions, you not only adjust to saving more without a lifestyle hit, but you also avoid the panic that can come with making drastic financial changes. Plus, if your employer has an auto-escalation feature, you can automate this process and ensure that your future is being built, brick by brick, while you focus on living your life.
Want to get inspired? Imagine saving an extra $1,000 a year and realizing that, thanks to compounding, that small move today could be worth over $50,000 in 20 years! Those future-you moments will be filled with gratitude.
3. Invest Wisely with Target-Date Funds:
Target-date funds (TDF) are the perfect solution for people who want to save without constantly monitoring the markets. These funds adjust automatically over time, becoming more conservative as you approach retirement. This allows you to gradually shift your portfolio to protect your nest egg as you get closer to needing it.
But here’s what makes them really exciting: they’re a one-stop-shop investment. You pick a fund based on your expected retirement year, and that’s it. The fund’s managers handle all the heavy lifting. Not only does this save you time, but it ensures your asset allocation evolves with you. Plus, this strategy removes the stress of trying to time the market, letting you sleep easy while your investments quietly work away.
However, if you’re looking for a more individualized managed service account that takes in your unique financial circumstance and goals, check out our Bespoke portfolio service. Similar to a target-date fund, Bespoke is more personalized and creates a clear path to your retirement goals with a customized savings plan built entirely online.
Think of it like setting your phone’s GPS for a cross-country road trip. You know your destination, and the GPS will automatically adjust as needed along the way. All you have to do is keep driving steadily toward your goal, confident that you’ll arrive safe and sound.
4. Don’t Leave Old 401(k)s Behind
How many of us have changed jobs a few times? It’s common to leave behind a trail of forgotten 401(k)s in old employer plans. But here’s the thing—those scattered accounts can end up costing you in fees and missed growth opportunities. Rolling them into a new 401(k) or an IRA can make all the difference. It gives you better control, lower fees, and potentially more investment options.
By consolidating, you can keep a better eye on your total retirement picture. Instead of trying to juggle multiple accounts with different rules, investment choices, and fees, you’ll have a clearer, streamlined view of your retirement progress. Plus, many new plans or IRAs come with improved investment options, which can lead to stronger growth.
Pro tip: When rolling over, pay attention to the investment options available in your new plan. Look for low-fee funds that align with your goals. Just this one move could save you thousands in fees over time, meaning more money stays in your account, working for you.
Take Action Today
Each of these power moves is like building blocks for a sturdy financial future. By making small, consistent decisions now, you’ll set yourself up for a retirement that’s as exciting as it is secure. Whether it’s maxing out contributions, increasing your savings rate, investing wisely, or consolidating old accounts, these steps are key to unlocking a retirement that’s truly golden.
If you have an account with Slavic401k, you can review questions related to your contributions, withdrawals, and fees here. If you have an account with another financial institution, contact them directly.
Contact us today if you have questions about setting up an account with Slavic401k through your employer.
