BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Two Big Ways To Boost Your Retirement Savings

Following
This article is more than 5 years old.

Retirement saving is a matter of math and motivation. If you're not motivated to save, then the math won't add up.

Surprisingly, there are just a handful of powerful ways to boost your retirement kitty. They are real simple and anyone can do well. Save as much as you can and leave the money alone until you need it at retirement age.

Unfortunately, those who are going to come up short are either unable to save or don't have access to retirement plans. According to EBRI, the retirement research organization, here's why Americans are undersaving:

-- Nearly 43% of Americans surveyed will not reach their retirement goals. That's roughly the same percentage of workers who don't have access to employer-offered retirement plans like 401(k)s.

-- Millions are cashing out their 401(k)s. You don't need to be a retirement expert to know that not only do you take a tax hit on money withdrawn from plans before retirement, it eats away at your kitty. EBRI reports:

"Eliminating pre-retirement cashouts would enable an additional 20 percent of low-income workers currently ages 25–29 who will have more than 30 years of simulated eligibility for participation in a 401(k) plan to attain an 80 percent real replacement rate from Social Security, 401(k) plan balances and IRA rollover balances that originated in 401(k) plans."

Translation: Leave your money in your retirement plan. Don't borrow from it or cash it out. You'll have more at retirement.

What if your employer doesn't offer a 401(k)? You can set up your own plan. Every mutual fund and discount brokerage offers low-cost IRAs.

If you have a small business, you can set up a SEP-IRA or solo 401(k). They are not hard to set up. At the very least, save in any kind of retirement plan as early as possible.

Follow me on Twitter or LinkedInCheck out my website or some of my other work here