Boost your saving

If you can afford to invest even more money—by saving more, reducing your spending, or a combination of both—there are other steps you can take to feather your retirement nest egg.

■ Take advantage of retirement plans for self-employed workers. In 2023, you can contribute 20 percent of your self-employed net income, up to a maximum of $66,000, in a SEP IRA. SEP IRAs are widely available at financial institutions that offer IRAs. If you have a side gig, you can contribute the maximum to your employer’s 401(k) and contribute to a SEP based on your self-employment income.

■ Another option for self-employed savers is a solo 401(k) plan. In 2023, you can contribute up to $66,000 in one of these plans, or $73,500 if you’re 50 or older (you can’t make catch-up contributions to a SEP IRA).You can stash that much money in your plan because you’re making contributions as an employer and an employee.

■ Make after-tax contributions to your retirement plan. Some employers allow workers who have maxed out on tax-advantaged contributions to make additional aftertax contributions to the plan, up to a maximum of $66,000. While the contributions won’t reduce your taxable income, earnings on your investments are tax-deferred until you take withdrawals. Some plan providers will allow you to convert that money to a Roth 401(k) through what’s known as an inplan conversion.

■ Invest in taxable accounts. While it’s nice to get a tax break, taxable accounts play an important role in saving for retirement, too.Taxes on long-term capital gains range from 0 to 20 percent, and these accounts offer more liquidity than retirement plans—you won’t be penalized if you take withdrawals before age 59½.