10 tips to help you boost your retirement savings — whatever your age

Alfredo Gaxiola CPA in Houston

1. Focus on starting today

Especially 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," Greenberg says.

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 pretax money, which can potentially be a significant advantage. Say you're in the 12% tax bracket and plan to contribute $100 per pay period. Since that money comes out of your paycheck before federal income taxes are assessed, your take-home pay will drop by only $88 (plus the amount of applicable state and local income tax and Social Security and Medicare tax). That means you can invest more of your income without feeling it as much in your monthly budget. If your employer's 401(k) plan also offers a Roth 401(k) feature, which uses income after taxes rather than pre-tax funds, you should consider what your income tax bracket will be in retirement to help you decide whether this is the right choice for you. Even if you leave that employer, you have choices on what to do with your 401(k) account.

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," Greenberg says. For example, an employer may offer to match 50% of employee contributions up to 5% of your salary. That means if you earn $50,000 a year and contribute $2,500 to your retirement plan, your employer would kick in another $1,250. It's essentially free money. Don't leave it on the table.

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. To determine what type of IRA could work best for you, go to Find out which IRA may be right for you and view the most current 401(k) and IRA contribution limits.

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. The good news? 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. So 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

You've probably heard the phrase "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, Greenberg says. You can automate your investment selection with the Merrill Automatic Investment Plan, which invests assets automatically in specific funds.

7. Rein in 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. Merrill has a cash flow calculator that can help you determine 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 the Personal Retirement Calculator to help determine at what age you may be able to retire and how much you may need to invest and save to do so.

9. Stash 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 on a new designer purse or a vacation, "don't treat those extra funds as found money," Greenberg says. She advises that you 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

"This is a big one," Greenberg says. "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 reduced Social Security retirement benefits, but 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.

📞(281) 861-7718 | 📍4654 Hwy 6, Houston, TX 77084

Source: merrilledge

Alfredo Gaxiola has worked on numerous IRS problem cases and has successfully settled with the IRS to release liens on houses, bank accounts and wages and, if needed, setting a payment installment plan that is not burdensome for the client. He has conducted appeals before the U.S. Tax Court and obtained favorable resolutions in reducing the tax debt of his clients. Mr. Gaxiola served as Treasurer of Camara de Empresarios Latinos, one of the largest and strongest Hispanic organizations in the city of Houston. He has conducted financial and accounting seminars for the Houston Small Business Development Corporation, as well.

Alfredo Gaxiola CPA in Houston

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