Saving for retirement is more daunting than it should be. According to Investopedia, 20% of workers aged 55 to 64 live in constant fear that they may never be able to afford their retirement. As such, it’s very important to start planning your retirement early. Luckily, financial advising services can help you figure out how best to save money for your retirement. Here are three tips to ensure that your retirement plan is effective.

Limit Your Discretionary Expenses or Boost Your Income

One of the first things you need to do to ensure you have a solid retirement plan is to take a careful look at how you spend your money. The idea would be to cut unnecessary expenses and use that money to beef up your retirement savings. If you feel that you are already frugal enough, the next thing should be to boost your income. One of the easiest ways to increase your income is to take on a side hustle. If you don’t have the necessary skills, or you don’t have enough time for that, you can also consider changing jobs. People who switch jobs generally see salary increases faster than those who stick with one employer.

Fully Fund Your 401(k)

If you are offered a 401(k) at work, you should consider funding it to the highest amount possible. To get a sense of how this will benefit you, here’s a good example. If you are 40 years old and contributing $17,500 yearly to a 401(k), that money could accumulate to about $1.3 million or more in savings by the time you get to 65. This assumes an 8% return without employer contributions. This is a very powerful savings tool, and it’s proof that workers closer to retirement should carefully consider funding their 401(k)s as much as possible.

Invest Beyond Your Retirement Accounts

It’s possible to still be behind even after maxing out your retirement accounts. A good idea would be to look at how you can invest money into other things like taxable brokerage accounts. These can be powerful tools that you can use when saving for your retirement. Unlike those specifically designed for retirement savings, taxable brokerage accounts do not have contribution limits. Because you are not limited when it comes to how much you can deposit, these accounts allow you to invest after you have maxed out all the other options. One of the most significant benefits of these accounts is that you can invest and withdraw without penalty.

Are you trying to figure out how to catch up on your retirement savings? Your strategy and how fast you need to start making major adjustments should be determined by your age and when you plan on exiting the workforce. Do you need help with retirement planning? Get in touch with our financial advising services team today at Ferris Wheel Finance, Inc. We would love to help you.