Ten Tips to increase your retirement savings

Whether you just started working or you're nearly done, you can still potentially grow your nest egg.

When planning for retirement, the truth is that the earlier you start saving, the better off you could be. But even if you began saving late or have yet to begin, it's important to know that you're not alone, and there are steps you can take to increase your retirement savings.

1. Focus on starting today

If you're just beginning to put money away for retirement, start saving as much as you can now and let compound interest — the ability of your assets to generate earnings, which are reinvested to generate their own earnings — have an opportunity to work in your favor. The earlier you can get started, the better off you'll be.

2. Contribute to your 401(k) account

If your employer offers a traditional 401(k) plan and you're eligible, it may allow you to contribute pre-tax money, which can potentially be a significant advantage.

3. Meet your employer's match

If your employer offers to match your 401(k) plan contributions, make sure you contribute at least enough to take full advantage of the match. It's essentially free money.

4. Open an IRA

Consider establishing an individual retirement account (IRA) to help build your nest egg. You have two options: a Traditional IRA or a Roth IRA. A Traditional IRA may be right for you depending on your income and whether you or your spouse are eligible to participate in a workplace retirement plan. Contributions to a Traditional IRA may be tax deductible, and the potential investment earnings have the opportunity to grow tax deferred until you make withdrawals during retirement. If you meet the phased-out modified adjusted gross income limits, which are based on your federal tax filing status, a Roth IRA may be a good choice for you. A Roth IRA is funded with after-tax contributions, so once you have turned age 59½, qualified distributions, including any potential earnings, are federal income tax-free (and may be state income tax-free) if certain holding period requirements are satisfied.

5. Take advantage of catch-up contributions if you're age 50 or older

One of the reasons it's important to start saving early if you can, is that yearly contributions to IRAs and 401(k) plans are limited. As of the calendar year you reach age 50, you're eligible to go beyond the normal limits with catch-up contributions to IRAs and 401(k)s. If over the years you haven't been able to save as much as you would've liked, catch-up contributions can help boost your retirement savings.

6. Automate your savings

Be sure to "pay yourself first." Make your retirement contributions automatic each month, and you'll have the opportunity to potentially grow your nest egg without having to think about it.

7. Control your spending

Examine your budget. You might negotiate a lower rate on your car insurance or save by bringing your lunch to work instead of buying it. Take a good look at where your money is going and find places to reduce spending so you have more to save or invest.

8. Set a goal

Knowing how much you may need, not only can help you better understand why you're saving, but also can make it more rewarding. Set benchmarks along the way and gain satisfaction as you pursue your retirement goal. Use our APCI FCU Retirement Calculators to help you determine how much you will need to save for retirement and how long your savings will last.

9. Save those extra funds

Extra money? Don't just spend it. Every time you receive a raise, increase your contribution percentage. Dedicate at least half of the new money to your retirement plan account. And while it may be tempting to take that tax refund or salary bonus and splurge, don't treat those extra funds as found money. Treat yourself to something small and use the rest to help make bigger leaps toward your retirement goal.

10. Consider delaying Social Security as you get closer to retirement

For every year you can delay receiving a Social Security payment before you reach age 70, you can increase the amount you receive in the future. Age 62 is the earliest you can begin receiving Social Security retirement benefits, but they will be reduced if taken before your full retirement age (67 for people born after 1960). For each year you wait (until age 70), your monthly benefit will increase, and the additional income adds up quickly. Pushing your retirement back even one year could make a significant difference. It can also increase potential future survivor benefits for your spouse.

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