It can be overwhelming to begin planning your retirement savings. But there are fairly painless ways to get started. Here are some tasks that will allow you to boost your retirement savings.
Set a goal. Start by creating a goal for your retirement savings. This could include a variety of different goals including how much you want to have saved when you retire, when you want to retire, and how much you want to contribute this year. Having a goal will bring clarity and focus to your efforts.
Take advantage of your employer 401(k) match. If you aren't already, make sure you are investing the minimum amount of money necessary to receive the full amount of your employer's matching contribution.
Open an IRA. If you need an account outside of the workplace to do some retirement investing, the best place to start is with a traditional or Roth IRA. There’s still time to open an account and make a contribution that counts toward tax year 2010.
Reduce your investing expenses. Review the specific expense ratios of the funds you are currently investing with. Compare them against other funds at your disposal. Find out if you can maintain your current risk tolerance and allocation while moving your money into funds that are less expensive.
[Visit the U.S. News Retirement site for more planning ideas and advice.]
Setup an automated contributions. The best way to guarantee you will save for retirement each month without having to think about it is to setup an automatic contribution from your paycheck or checking account to a savings or investment account. Talk to your employer about setting up a direct deposit or have the money automatically shifted out of your checking account.
Increase your 401(k) contribution by 1 percent. If you're already investing through the company 401(k), increase your contribution percentage by just 1 percent. You probably won't notice a 1 percent smaller paycheck. Also consider creating an automatic increase so that each year your percentage contribution goes up without you having to do anything.
Ask for a raise. More income from your current employer means you will be able to save more. Present a legitimate, professional request for a wage increase and see how your employer responds. It can't hurt to ask.
Apply for a higher-paying job. If you can't get a raise at your current job, seek higher-paying employment elsewhere. Even though we're in a tough job market, there may be another employer out there willing to pay you more. You certainly won't know if you don't apply.
Cut unnecessary expenses. Free up more money in your budget by aggressively slashing your expenses. First, focus on eliminating items that you rarely or never use. Everyone has something in their budget that they can cut out. Then focus on lowering your bills for the items that you must have. The more you can live within your means, the faster you'll get to your retirement savings goals.
Apply for disability and life insurance. Your biggest asset in helping to build a solid nest egg is your ability to earn a living now and stash money away. If you can no longer work, then you obviously can't continue to save. By having the proper insurance you will, in effect, be protecting your retirement savings in case the unexpected happens.
Philip Taylor is the author of 104 Ways to Save Extra Money. Read his popular blog, PT Money: Personal Finance for more insightful money tips, like his recent suggestions for the best online checking accounts.