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How To Maximize The Benefits Of Your Retirement Savings

How To Maximize The Benefits Of Your Retirement Savings
Diana Star May 7, 2019
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It’s possible to adequately develop your retirement plan regardless of whether you began working just recently or eons ago. It’s never too late nor is it ever too early to start saving for retirement.

One beneficial tip when kick-starting the retirement planning process that most people are not really aware of is starting it early enough. Thanks to compound interest, there are plenty of benefits that come along with it.

At some point in our lives, we will all need to plan for our retirement. Choosing the exact day to begin may prove to be somewhat tricky. You could end up paying a hefty price for even the slightest wrong move.

Are you actually ready to retire? Even if you start late or are still learning the hoops, keep in mind that you’re not alone.

On that note, there are certain strategies you can put in place to maximize the benefits of your retirement account.

This post will also assist you in making the critical decisions that revolve around retirement. No matter your financial status quo, the following tips will help in boosting your savings.

1. Use Legitimate Apps to Make the Retirement Planning Process Smoother

Life has a way of getting your mind to focus more on non-essential stuff rather than giving thought to issues that will be of benefit later on in life.

Other times, we’re caught up in our ever-increasing list of things to do that we forget to plan our retirement.

Whether you have a successful retirement or not isn’t really determined by your finances. Instead, they’re just a tool to help us get to where you want to be in life.

What better way to ensure a successful financial future other than utilizing modern-day technology? The following are some of the retirement-related fields and the best app(s) to use for each:

Net Worth Tracking And Budgeting

Start planning for your future by understanding where you’re channeling your finances. It’s impossible to set aside money for your retirement goals if you’re unable to point out the areas that you need to cut back on or tweak a little.

If you’re not fully accountable for your monthly expenditures, it’s time you drafted a comprehensive budget or even better, download the Mint app.

Mint basically gives you the ability to keep track of your net worth while simultaneously serving as a great budgeting tool.


The Acorns app is a great app to take your investing to a whole new level. How does it work? It assists you to invest any spare change in exchange-traded, low-cost funds.

It does this by simply rounding up any purchased you’ve made on your debit or credit card to the next dollar.

The difference is then invested into one among six of your preferred portfolios. For accounts below $5,000, you’ll be charged just $1 for 30 days.

On the other hand, if you seek to get a clearer overview of each of your finances and investments in general, Personal Capital will work out for you just fine.

Getting Out Of Debt

Since we’ve already delved into how debt can be a huge stumbling block in your quest to maximize your retirement account’s benefits, you may need some help going about it.

Apps such as Mortgage Calculator Pro and Loan Calculator can be highly efficient apps in the debt repayment process.

These apps will also give you a different perspective for each time you want to make extra payments. From there, you’ll receive the necessary amortization schedules.

Credit Score Monitoring

Your credit score status is linked to a number of money-related matters, your financial report card being on top of the list.

When handled properly, this number has the potential to grow exponentially. In turn, you can gain access to higher loans with lower interest rates.

A credible credit score monitoring app such as Credit Sesame will enable you to consistently keep a close eye on how you spend your money.

Also, you’ll be able to keep track of your most recent purchases and decide where to cut back.

2. Delay Your Social Security Payment

As early as age 62, workers can start claiming their Social Security benefits soon enough. The downside of rushing to claim your benefits is that you stand to lower them based on how many months you have left before attaining full retirement age.

For instance, employees who decide to retire at age 66 can receive their full Social Security Benefits. They can earn relatively more if only they choose to claim the benefits at a later point in their lives.

Social Security administrative law states that workers who delay their Social Security are eligible to receive more than 132 percent of their monthly benefit. That bonus will be cut off as soon as you hit age 70.

If, at any point, you turn seventy, don’t hesitate to claim Social Security. You won’t receive monetary benefit from further delayment. For each year you choose to wait (till you attain the age of 70), there will be an increment in your monthly benefit.

The extra income will eventually add up exponentially. Even for just a year, pushing back your retirement will have a significant impact in your later life.

3. Don’t Quit Your Job

For the ever-growing majority of the senior working-class community, retiring from a specific career doesn’t automatically equate to quitting your job.

Only the wise will choose to stick to their current employers way after they start collecting their Social Security benefits.

In your golden years, would you rather hit a few golf balls or work behind a desk? Very few people within the retirement age gap would opt for the former.

This doesn’t necessarily mean that you’ll be unable to develop a perfect blend between leisure time and work time.

If you can manage to stay in the workforce a little longer and delay getting your social security checks, you’ll be able to garner bigger payments every month for the rest of your life. Over time, this will really add up.

Likewise, if you’re able to keep off your IRA or 401k, it will give those accounts sufficient time to grow. When you start withdrawing, you could enjoy a significantly huger nest egg.

The less income you make in the course of your working life, the more your Social Security will be in retirement.

If your AIME is approximately $1,000, then your Social Security Benefits (PIA) has a high chance of replacing a huge chunk of your income – approximately 90% of it.

4. Add to Your Contribution Percentage by Stashing Away Extra Funds

When you notice you have some extra cash left from your paycheck, the worst thing you can do with it is to splurge on non-essentials.

Half of that money can be set aside specifically for your retirement plan. As tempting as it may be to take that salary bonus or tax refund and spend it on vacation or a new designer purse, it’s not worth it.

Making rational decisions with your finances – especially when retirement is involved – is a process that should be approached with extra vigilance.

As far as extra cash is concerned, there are loads of ways to stash it in a way that will maximize your retirement benefits.

One way is by using the contribution rate escalator tool. This kind of tool is accessible through your retirement plan provider.

It will assist you in determining how much you can save. Over time, you’ll be able to increase your retirement plan contributions.

The extra money can also be set aside for an important cause such as catering to short-term emergencies.

In addition to boosting your retirement plans, it’s essential to consider saving some of that money for emergency purposes. Doing this ensures you have an automatic safety net account.

Finally, get a debit card that will round up all your purchases and put all your money in a separate account from your day-to-day living expenses checking account. Each time you make a purchase,

5. Don’t Allow Debt to Be a Limiting Factor

One of the biggest hindrances towards the path to retirement is excessive debt. If you already have a few debt-related issues weighing you down, now’s the time to break free from it with a good old debt reduction plan. If you’re not there yet, don’t allow debt to derail any debt retirement plan you may have in place.

There are various forms of debt such as student loans and mortgages that turn out to be better than others.

When they’re integrated into your overall financial life plan, they can be very beneficial to your retirement account.

On the other hand, auto loans, high-interest personal loans, and credit card debt have the potential to create a continuous loop of debt payments. Often, vicious cycles such as these make retirement seem impossible.

The following are a few simple tips to make the best of your retirement account without allowing debt to be a limiting factor:

  • Stand out from the average working-class citizen and come up with an individual working plan.
  • At the end of every month, ensure you’ve paid off your credit card balances in full.
  • Skip a day or two before making any hefty purchases.
  • As much as possible, try keeping your basic living expenses at a minimum (below 50% of your average monthly income). The 50/30/20 rule may come in handy at such a time.
  • Every purchase you make should be done in a discretionary manner rather than using an envelope or credit card.

To permanently rid yourself of any debt, you’ll need to keep up the good habits and do away with the bad ones. Once you stumble upon some extra cash, pretend it’s not there and put it into your retirement savings, no matter how hard it may be.

6. Set Achievable Retirement Goals

Make your retirement benefits more rewarding by being aware of how much effort, time and cash you’ll need to put in.

Come up with reasonable retirement goals and work your way towards a better retirement future. Determine the exact amount from your annual income that will be enough to maintain your individual lifestyle.

Putting into consideration that you’ll most likely have little expenses, you’ll need approximately seventy percent of your pre-retirement income.

Once you’ve determined the exact amount you’ll need in retirement, go ahead and find out how much you’ll get from your Social Security.

Visit the Social Security Administration’s official website for a rough estimate of what to expect in terms of benefits.

From your total annual income, subtract your forthcoming annual benefits. In case you receive a pension, don’t forget to subtract that as well.

The end result will be the annual income that you should yield from your retirement savings. Once you have everything figured out, the next thing to do will be to record the data into an online savings goal calculator.

The calculator will help you a great deal by helping you turn your retirement target into a monthly savings goal that is more manageable.

Having drafted your savings goal, be sure to draft a budget that will assist you in achieving it. Of course, you’ll need to keep track of your progress so that you can focus on making your retirement goals a reality.

7. Perform Extensive Research

Before deciding to retire, ensure you have a firm grasp of the amount you may need to spend every year.

From there, you can come up with well-though-of strategies for how to use your investment income. You’ll also need to look up other avenues to add to your pension and maximize the benefits of your retirement account.

You’ll also need to put some extra thought into how well you may need to spend your final working days. You may need to put in a two weeks’ notice before finally deciding to leave the workforce for good.

Expert financial planners recommend that you first give semi-retirement a shot. Doing so will open a gateway of exploring other fulfilling activities right before you call it quits. Retirement planning should never be a ‘wing it’ kind of decision.

If you feel it’s a good time to hang your boots, do a rigorous financial analysis. Determine how able you’ll be not to outlive your finances.

8. Establish an Individual Retirement Account (IRA)

Consider opening an IRA account to assist you in growing your nest egg. A Traditional IRA account may work out for you depending on your monthly wages and if your spouse has a workplace retirement plan in place.

Right until you make withdrawals in the course of your retirement, the contributions you make to the traditional IRA account will most likely be tax-deductible.

In general, linking your retirement planning strategy to a tax-advantaged savings account may look like a relatively simple venture.

Individual Retirement Accounts are significant savings tools that allow you to contribute a huge portion of your income annually. It also lets you grow your savings on a tax-free basis or tax-deferred basis.

The category of IRA you choose may have a notable impact on your retirement savings in the long-term. The more reason why you should take time to learn the difference between the two.

The major thing sets them apart from each other all boils down to how soon taxes are to be paid and investor eligibility.

Also, withdrawal policies and the variations associated with contribution limits play a significant role in determining the most appropriate IRA.

Anyone below the age of seventy who earns a substantial taxable income can open as well as contribute to a traditional IRA.

There are no age restrictions when applying for Roth IRAs, though you need to be eligible to make your contributions to one.

There are also a couple of income requirements you need to meet. Using the most appropriate IRA for your individual retirement account can maximize it a great deal.

9. Consider Automating Your Savings

Ever heard of the phrase ‘pay yourself first? ‘ This is basically a strategy in which you can automate your retirement contributions every month.

Doing this will give you an opportunity to develop your nest egg without putting much thought into it.

In the books ‘I Will Teach You to Be Rich’ and ‘The Automatic Millionaire,’ authors Ramit Sethi and David Bach explore the unique avenues in which you can gain control of your retirement savings with the least effort.

The automation process all starts with your monthly paycheck. If you receive your dues via direct deposit, you’re among the vast majority of workers with multiple payment options. For instance, you could consider starting with an automatic 401(k) contribution.

From there, split your direct deposit into multiple accounts. In such a case, you may need to fund a ROTH IRA or IRA account by splitting your direct deposit. In 2019, seniors above fifty years can contribute $6,000 or more in any of the IRAs.

Once it reflects in your account, you can automate the investments using your preferred monthly investment.

You could also periodically log in to your investment account and channel the funds directly into your low-cost mutual fund of choice.

10. Keep Your Health Intact

Last but not least, one of the greatest ways to maximize the benefits of your retirement account is to stay healthy.

There’s every need to collect your benefits when you’re physically and mentally fit. Give a lot of thought into the kind of life you wish to lead upon retirement.

Look at your retirement plans and assess yourself if you’re ready to set those plans into motion.

Probably by that time, your body may be heavier or worse, laden with certain illnesses. Unless you decide to do something about it right now, there’s a good chance that you won’t get to enjoy all the effort you’re putting into maximizing your retirement benefits.

There’s more to ensuring an enjoyable retirement life than just having enough funds in your investment portfolio.

If your health is in poor condition, millions you’ve managed to stash away through the years won’t benefit you in any way – aside from settling hospital bills.

Nowadays, is in search of weight loss pills and miracle vitamins in a bid to improve their health. As expensive as they may be, most, if not all of them, don’t have a significant health impact.

The following are a few simple but highly significant ways you can adjust your lifestyle habits to maximize and utilize your retirement benefits:

Quit Smoking 

The best thing you can do for your health right now is doing away with cigarettes and anything cigarette-related. Smoking is a leading cause of most fatal diseases. Enrolling into rehab will go a long way in increasing your overall life expectancy.

Shed A Few Kilos

Obesity is perhaps the most widespread risk to a majority of Americans today. The complications associated with being overweight is simply overwhelming. If you consider yourself to be obese, make the right choice now and get your body in good shape through exercises and maintaining a healthy diet.

Schedule a Regular Visit To Your Doctor

At least once a year, it’s good to check on your health. Having a sit-down with your doctor can help you determine how to tackle any serious health problems while they’re still in their first stages. Doing so will either minimize its critical effects or get rid of it altogether.

Final Thoughts

Understanding the need to set aside a certain amount of money is only the first step. The next steps, including frugality and saving should be approached with utmost seriousness.

As a potential/full-on retiree, take time to comparison shop, bargain hunt and negotiate more often for better prices.

Although it’s not been publicized as much, ask for senior discounts. Do all these to ensure you don’t spend any amount you have to the last dollar.

Be fully aware of the specific amount you’re willing to part with monthly or annually and follow the above strategies to boost your contributions.

Based on reports from a certain study, saving too little and starting too late are among retiree’s greatest regrets.

Worrying about making the most out of your retirement benefits right now will heighten the chances of you getting a prosperous and worry-free retirement. Best of all, you won’t have anything to worry about.

Diana Star

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