Experts Weigh In With 4 Strategies To Boost Retirement Savings

Retiring rich is definitely harder these days than a few decades ago. Wages, which had increased without fail for nearly 30 years, began to stagnate in the mid-1970s. For the bottom 90% of earners, real income outright fell between 1972 and 2013. At the same time, jobs with employee pensions have all but vanished, severely limiting available means of income for today’s retirees.

Thus, there are major forces beyond your control that are making retiring rich harder. So, don’t make it worse by neglecting what you do have control over. The top retirement experts have weighed in on how best to take effective control.

Check out these four essential retirement tips from the top experts in the business.

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1. Treat Your Retirement Savings Like A Business

A good place to start is prioritizing repaying your debt, said J.D. Roth, retirement expert and founder of the website Get Rich Slowly. And a helpful strategy to make that more appealing is to treat your personal finances like a business.

“For years, I had struggled to manage my household finances. But at the same time, I had no trouble running profitable businesses. ‘What if,’ I eventually asked myself, ‘I treated my personal finances like a small company? What if I did my best to earn a profit every month?’”, said Roth. “This one shift in mindset made a huge difference in my life. I stopped viewing saving as sacrifice. It wasn’t saving, it was profit. Changing my mindset made saving a pleasure instead of a pain,” he added.

2. Max Out Your Contributions

Equally important, if not as exciting, is to make sure you’re maxing out your contributions to retirement savings. “Both my wife and I contributed to an IRA even when we maxed out our 401ks,” said Ted Jenkins, certified financial planner and co-CEO of oXYGen Financial. “So many people forget you can do this, which can add another $11,000 to $13,000 a year in additional retirement savings. It seems so simple, yet many people simply don’t do it.”

3. Figure Out How Much You Should Be Saving

Maxing out various channels of retirement contributions is important. But if you’re saving blindly, you’re setting yourself up for failure. CNBC senior personal finance correspondent Sharon Epperson uses the so-called “the 60 percent solution” to determine how much she should save.

“Limit ‘committed expenses’ like taxes, essential household expenses, rent/mortgage, utilities, phone, basic food, transportation, clothing, insurance premiums and other recurring bills to 60% of your gross income,” said Epperson. After that, 20% is for long-term savings, — 10% of that specifically for your 401k — and the other 10% for luxuries and non-essentials.

4. Focus On Income Over Assets

Because retirement is inextricably linked to having a retirement goal, people obsess about your retirement “number”, said Ted Hegna, retirement expert and former VP at New York Life. “The more you have saved, the better; the bigger your piece of pie, the better.” But this approach is misguided.

“Retirement has nothing to do with assets — it has everything to do with income,” he said. “Cover your basic expenses in retirement with some form of guaranteed lifetime income.” Armed with these fundamental yet too-often overlooked strategies, you can make your retirement dreams a reality.

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