In a perfect world, you might have started saving big for retirement when you were much younger. And if you’ve waited — or are just recently getting serious about saving — you may worry that you’ll never catch up.

If you, like many Americans, are playing catch-up on savings, you’ve got some secret weapons. Your dream retirement may simply require a tweak to your strategy and these simple, but powerful, techniques.


Saving for retirement on your own can feel like a long process. But you can accelerate what you’re putting away with help from a second contributor — your employer.

Many businesses offer their workers a 401(k) matching program. When you save for retirement through your company’s 401(k) plan, it will match your contributions up to a certain amount. It’s essentially free money! If you can, contribute enough from each paycheck to grab the full match from your employer.


Hopefully you’ve decided to contribute up to the company match. That means you’re also getting help with your savings from the IRS as 401(k) plans and IRAs get favorable tax treatment. With the traditional version of these accounts, you don’t pay any federal tax on contributions today; in fact, you won’t pay any tax on the money you contribute until you withdraw it in retirement. Since these accounts are meant to encourage retirement saving, you will be subject to a 10 percent penalty in addition to ordinary income tax if funds are withdrawn before age 59½. You could alternatively opt for the Roth version of these accounts. With a Roth, you pay tax today, but never pay it again if it’s a qualified distribution. Many investors have a mix of these types of accounts.

When you’re ready to contribute even more money, you’ll be able to contribute up to limits set by the IRS. For 2019, you can contribute up to $19,000 to your 401(k) plan if you’re under 50 and up to $25,000 if you’re 50 or older. If you have an IRA (or Roth IRA), you’re allowed a $6,000 contribution up to age 50 and a $7,000 contribution annually if you’re older.


If you’re not saving at all or only saving a small percentage of your salary, upping your contribution to 10 or 15 percent of your salary tomorrow can seem, well, spartan. But more gradually upping your contribution to that level can help you adjust to a habit of savings.

After contributing enough to get your full company match, try increasing your contribution by 1 percent every month or quarter. Pretty soon, you’ll be saving a lot more, but because the amount you save each month is going up slowly, hopefully you’ll barely notice.


IRAs and 401(k) plans both have one thing in common: At some point — either when you earn it or when you withdraw it — you have to pay taxes on your contributions and any gains. And that can eat away at your savings. But a Health Savings Account (HSA) offers a triple tax benefit seen nowhere else.

With an HSA, you’re free to max out contributions that are deductible from federal income (state deductibility will vary by state), invest that money with no tax on your earnings, and withdraw funds tax-free for qualified medical expenses. And that pot of money is sure to be of use, since the average retiree’s medical costs are 15 percent of his or her annual expenses.

Check to see whether your employer offers a high-deductible health plan with an HSA to which you can contribute. If you’re already using one, consider bumping up your contributions and ensuring that the funds you’re not using now are being invested automatically for the future. In 2019, the annual HSA contribution limit for individuals with self-only coverage is $3,500; the limit for those with family coverage is $7,000.


It can be easy to say you don’t want to take too much risk with your savings. After all, who wants to see their money go down? But, generally, with risk comes reward over the long term. Make sure you’re dedicating enough of your savings to stocks, which historically offer the most potential for growth over time.1 If your investment mix doesn't reflect the level of risk you’re willing to take given your goals and timeline, you may want to consider making some changes to your investment plan based on your risk tolerance.

You could also supplement your financial plan with products like whole life insurance, which grows cash or accumulated value that could be considered a stable asset not correlated directly to the market.


Let’s say you’re 40 years old with nothing saved for retirement, have an annual income of $80,000 and earn 2 percent pay raises each year. Through your own contributions and those of your employer, you’re able to start saving 15 percent of your income each year toward retirement.

If you retire at 65 and assuming 7 percent return, you’ll have about $830K saved up — not bad for just 25 years of saving. But, if you keep working until you’re 68, you’ll have $1.08 million in savings. That’s 30 percent more that you have from staying in the workforce just three additional years. (Check out your own numbers with this calculator.)


Saving for retirement can be a confusing process. How much do you really need? Are you on target? Does your portfolio match your goals and risk tolerance?

A seasoned financial professional can help you see how everything fits together. The right advisor can help you clarify your goals, design a portfolio, set up a savings plan and give you peace of mind that comes along with financial planning. And, if you’re playing catch-up, that expertise may be just what you need to sidestep obstacles and make your retirement dreams a reality.

1Past performance is no guarantee of future performance. No investment strategy can guarantee a profit or protect against loss (including loss of principal). Although stocks have historically outperformed bonds, they also have historically been more volatile. Investors should carefully consider their ability to invest during volatile periods in the market.

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