The Ukiah Daily Journal

Financial Wellness

4 simple ways to save more for retirement


It’s never too early to begin saving for retirement. While millions of people have no doubt heard or read those very words before, surveys indicate that few people are taking that lesson to heart. A 2018 survey from found that 20 percent of Americans don’t save any of their annual income. Things aren’t necessaril­y rosier in Canada, where the financial institutio­n CIBC reports that 32 percent of people nearing or on the cusp of retiring have nothing saved for retirement. Saving for retirement can seem impossible in households where every dollar counts. But the following are four simple ways to save more for retirement without making dramatic lifestyle changes.

1. Turn raises into retirement savings.

According to the Worldatwor­k 2018-2019 Salary Budget Survey: Top Level Results, salary budgets in the United States are projected to rise by an average of 3.2 percent in 2019, while those in Canada are expected to rise by 3 percent. Working profession­als can save more for retirement by converting some or all of their raises into retirement savings. Pre-tax retirement accounts allow working profession­als to put aside money before taxes are paid, so weekly paychecks will not be greatly affected if you choose to increase the percentage of your income you deposit into such accounts. Do this each time you receive a raise and your retirement savings will grow considerab­ly.

2. Put bonuses to work.

Profession­als who receive bonuses can speak to their employer and request that their retirement contributi­on rates be increased when bonuses are issued. Many 401(k) retirement plans allow workers to contribute as much as 80 percent of their paychecks. While that’s not sustainabl­e for most people every pay period, increasing your contributi­on rate dramatical­ly when your bonus is issued is a great way to save more for retirement. Contributi­on rates can then be returned to normal the following pay period.

3. Downsize your home.

Empty nesters nearing retirement age may benefit by downsizing their homes. Doing so can reduce utility bills, property taxes and other expenses, and those savings can then be redirected into retirement accounts.

4. Reinvest tax returns.

Working profession­als accustomed to receiving tax returns can use that money to catch up on their retirement savings. Rather than spending tax returns or depositing them into traditiona­l savings accounts, reinvest them into a retirement account. Speak with a financial planner to help you figure out how to accomplish this goal. Even if it requires opening a new account, the long-term benefits or reinvestin­g returns are substantia­l. Saving for retirement is important, and it’s never too late or too early to start setting aside more money for your golden years.

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