7 Ways to Catch-Up on Your Retirement Savings

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2. Catch-Up Contributions

If you’re 50 or over, it could be time to play some serious catch-up. The Internal Revenue Service or IRS will allow workers who are aged 50 or older to make extra payments, called catch-up contributions, to retirement accounts. Because of age, the IRS increases the standard limits so that you can catch-up and make your retirement fund larger.

These extra contributions, allow older workers to contribute an extra $6,000 to a 401(k), 403(b), or a 475. An additional $1,000 to a Roth or traditional IRA and an extra contribution of $3,000 to a Simple IRA or Simple 401(k). If you have company-match as part of your retirement plan, you could be looking at even higher catch-up contributions, too.

3. Decrease Monthly Expenditures

The easiest way to find extra money is to look at your monthly spending. If you reduce your outgoings and cut down on consumption, there will be plenty of extra money to be placed into your retirement account. If you haven’t already got one, create a budget and look closely at your spending habits to see where your money goes.

For example, one of your large expenditures might be eating-out. If you find yourself spending lots of money on expensive dinners, this is an area where you can cut down. The same could be said for clothes shopping and vacations. Once you’ve cut out unnecessary cash-flow, you’ll have more money to put towards savings to maximize those catch-up contributions. However, if you’re approaching retirement with a $0 bank balance, it’ll take bigger sacrifices to catch-up. View the next page to discover a huge money saver.