Many people struggled with retirement savings in 2023, and understandably so. Inflation was fairly rampant last year, and many consumers were paying more for everything from utilities to groceries. If that impacted your ability to save for your future, that’s understandable.
The good news, though, is that it’s a new year. And that means you have a prime opportunity to ramp up your long-term savings efforts. If you’re intent on saving more money for retirement in 2024 than you did in 2023, here’s how to go about it.
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1. Save your entire raise if you can
At this stage of the year, you may not be used to getting extra money in your paycheck. In fact, your first paycheck may not have even come in yet.
Before you get into the habit of spending your raise, decide that you’ll save it for retirement, instead. You can do so by either increasing your automatic 401(k) plan contributions (talk to your payroll department about how to make this change) or setting up an automatic transfer to your IRA so your extra money lands in that account right off the bat.
2. Make sure you claim all the free money you’re entitled to
You may be entitled to free money for your retirement this year. Capitalizing on all of it could help you meet the goal of saving more this year than last.
First, see if your employer offers a match in your 401(k) plan. If so, contribute whatever amount it takes to snag that match in full.
Next, see if your health insurance plan is compatible with a health savings account (HSA). If so, find out if your employer will kick in money if you contribute, as some companies have this practice.
One thing to keep in mind is that employer matches for 401(k)s don’t count toward your annual contribution limit. HSA contributions from your employer do count, though. Either way, collecting your free money could boost your account balances nicely this year.
3. Bank any windfalls that come your way
During 2024, you may be the recipient of a one-off pile of cash. Your windfall might come in the form of a tax refund, a bonus for doing a great job at work, or a one-time side hustle you decide to take on (for example, a week-long house-sitting gig for your friend’s wealthy uncle).
It can be tempting to spend extra money when it’s outside of your regular paycheck. But if you make a point to bank that money, you can grow your savings nicely. The more savings you’re able to bring with you into retirement, the less financial worry you’re likely to be plagued with later in life.
If you’re many years away from retirement, you have many more years to build up your nest egg. But meeting and exceeding your savings goal for 2024 is a great way to get on a solid path. And if you’re able to save more for retirement this year than you did in 2023, you’ll have something to be really proud of by the time 2024 closes out.
