Unless independently wealthy, everybody needs to save for retirement. Too many people, though, struggle with this task and find themselves with less than enough money to survive when it comes time to quit working.
Most people understand the importance of setting up a 401k through work or other retirement plan savings account, but sometimes we wait too long or we don't invest a good enough amount. Luckily, these accounts are not the only way to save for retirement. The following are five more creative ways to ensure that your later years can be spent work free.
1. Find other ways to save money, and place the extra dough in a savings account.
If you have garages, attics and storage facilities filled with stuff you never use, try holding a garage sale or using eBay or Craigslist to sell these items. Can you eliminate the monthly magazine and video subscriptions? Can you knock down your cable bill by going with a less expensive option? There are plenty of ways to save money. Figure out what you can do, and start doing it. Even if it seems minimal, these small additions to your savings will significantly add up.
2. Continue to live within your first-job means.
When most people get a raise, they start to splurge and use the extra money to increase their expenses. Rather than do this, take the difference in your raise and put the money into a savings account. You can also do this with bonuses and commission checks. You were able to live within a smaller paycheck before, so you can easily continue to do it.
3. If possible, consider relocating.
Some areas of the country are much more expensive than others. For example, the cost of living in California is much more expensive than the cost of living in Texas. Also, if you lived in a five-bedroom house but no longer need the space, downsize to a condo. The amount of money you save on your mortgage payments and utility bills can significantly increase the amount of savings that gets placed into your retirement plan.
4. Get a new job.
Consider checking out other companies that have open positions in your profession. You may be able to earn a much larger income, and you can take the extra money and place it into your savings. Or you may be able to find a company that offers better retirement plan services, such as a company match 401k program or even a company pension.
5. Use programs to catch up.
It's smartest to start planning for retirement while in your 20s. This way, you have more time ahead of you to save, which will give you a larger amount of money to retire with. If you are a late saver, though, the government has plans that you can use as catch-up contributions. These plans are usually only offered to those who are 50 or older, and you need to consult the IRS or your account for current information and requirements.
To get the most out of your retirement fund, make sure to start early and to put as much money into it as possible. Even a small addition to the account each month can make a significant difference later.