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5 Ways You Could Build Your Retirement Savings


If you are like most people saving for retirement, you’ve likely put a lot of effort into planning and investing so that you get the best possible returns. After all, growing your nest egg—not losing money—is the goal.

Despite careful planning, life has a funny way of throwing curveballs that complicate your investment goals. For one, many of us are living a lot longer, making the prospect of running out of money in retirement a very real possibility.

Further complicating matters is that risk-averse investors tend to flock to fixed-income investments, which historically have been a potentially safe strategy but nowadays typically pay mediocre returns.

Having a comprehensive strategy to build your retirement savings—whether on your own or with the help of a financial advisor—is a must these days.

Here are some basic things you can do to help manage your retirement savings and potentially steer your investment strategy in the right direction:


retirement savings

1. Max out on retirement plan contributions

Employer-sponsored retirement plans like 401(k)s are very popular investment vehicles in the U.S. In fact, the estimated 550,000 existing 401(k) plans hold about $5.3 trillion¹ in assets for nearly 54 million American savers. In other words, they hold boatloads of money and represent a highly popular way to save for retirement.

If you are age 50 or older and still working, you may want to consider bumping up your retirement plan contributions. For 2018, in addition to the $18,500 elective deferral limit, you can sock away an additional $6,000 in 401(k) catch-up contributions. For both traditional and Roth IRAs, the contribution limits go up from $5,500 annually to $6,500 once you reach age 50.

The extra contributions you make could add up significantly over the long run if the retirement investment plans that you’re contributing to earn a nice return on your investments over time.

2. Get a side job

It’s probably safe to say that most people thinking about and saving for retirement are not entertaining the idea of getting a second job.

But if your expenses are taking a big bite out of your budget, it may be a good time to at least consider part-time work on the side.

There are some benefits to working a side job beyond being able to pay your bills. Any extra money you make could be used to invest to pursue your goals.

At the very least, you could learn a new skill to carry into retirement to help fight off boredom, pocket extra cash, or simply meet new acquaintances to socialize with.

3. Stay at work a few years longer

Once again, most people probably don’t want to think about the prospect of having to extend their careers any longer than they have to.

Those who are planning to work rather than retire are likely doing so because they enjoy it, but many need the income as well. Financial losses dating back to the Great Recession were significant, and those who lost jobs may have been forced to find new work with much lower salaries, thus extending their careers.

Those few extra years come with the benefit of a steady paycheck and being able to contribute to company-sponsored retirement savings plans for a longer period of time, as well as the added benefit of delaying your Social Security claim, which can mean higher monthly payouts later on.

4. Wait longer to claim Social Security

You can generally start claiming Social Security benefits at age 62, however if that is not your full retirement age², which is based on the year you were born, you’ll likely only receive a percentage of the full monthly benefit.

For example, if in 2018,³ you start claiming benefits at 62 but your full retirement age is 65, your monthly benefit will be reduced from $1,184 to $953. If you waited until 70 to claim benefits, you would have received $1,681 per month.

It’s important to carefully consider when you will claim Social Security benefits, because retirement may last longer than you think.

5. Cap investment fees and expenses

Inflation affects your buying power and bottom line when it comes to your retirement savings, but so can the costs of managing your investments.

It’s likely that if you are investing in mutual funds or exchange-traded funds, there are hidden fees you don’t know about.

There’s an expense ratio that you may have to pay for each fund you own. These costs are typically in the form of transaction fees and loads, and fees you pay to the manager of a fund.

Expenses like these are why it’s important to shop for lower-cost options.

If you are using a financial advisor to manage your investment portfolio, make sure to ask if he or she is getting you the lowest-cost options for each investment, because these types of fees—compounded over time—can take a significant bite out of your savings.


Whether you decide to use a financial planner or do it yourself, retirement planning requires active participation on your part if you expect your money to grow and last for the duration of retirement.

Avoid the temptation of putting your accounts on autopilot because economic dynamics are ever-changing, requiring that you keep an eye on your monthly statements and ask questions if you see something that doesn’t make sense. It’s your money after all.

retirement calculators

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk, including possible loss of principal. All performance referenced is historical and is no guarantee of future results. Mutual fund investing involves risk including loss of principal. An investment in Exchange Traded Funds (ETF), structured as a mutual fund or unit investment trust, involves the risk of losing money and should be considered as part of an overall program, not a complete investment program. An investment in ETFs involves additional risks such as not diversified, price volatility, competitive industry pressure, international political and economic developments, possible trading halts, and index tracking errors. Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.