5 Ways to Increase Your Retirement Fund During Your 40s and 50s

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3. Planning: Hold Out for Tax Savings

It can benefit your retirement a lot if you have a portion of your savings in a Roth 401(k) or Roth IRA, compared to a traditional version of both accounts. The difference is all about when you’ll be paying tax. With traditional retirement accounts, you get a tax break during your working life when you make contributions. But, once you retire you’ll be responsible for paying the tax then. And, as the tax is worked out by a percentage you’ll end up paying more tax when you’ve probably got a lower income.

However, if you have a Roth, you’ll pay tax when you contribute and withdrawals will be free. By choosing a Roth IRA at 40 instead of a Traditional IRA you can get 14% more income post-retirement or 11% if you choose a Roth at 50 years old. For a simplified explanation of different retirement plans, read Roth, Regular IRAs and 401(k)s Made Simple.

4. Lifestyle: Resolve to Live Healthier

The healthier you are, the less you’ll have to spend on health-care bills when you retire. In fact, according to a National Bureau of Economic Research study those who were among the healthiest 20% during their fifties retired with 3 times more in assets than the least healthy.

To stay healthy during your senior years all you need to do is complete just 2½ hours of moderate exercise per week. Also, eating a healthy diet and quitting smoking will help, too.

5. Mindset: Ignore Your Colleagues

Don’t be tempted to talk to your colleagues and friends about how large (or little) your nest egg is. In this instance, peer pressure doesn’t work, and it actually has the opposite effect. According to researchers, if you learn that you are significantly behind your peers in terms of retirement savings, it won’t motivate you. Instead, you’re more likely to ignore the problem which will only make matters worse. Your retirement savings are your focus, not anybody else’s, so it’s pointless to share this information. Instead, you should focus on growing your savings, not envying what others around you have.