If you struggled to save well for retirement in 2023, rest assured that you were probably in good company. A lot of people struggled to carve out money for savings last year due to factors like lingering inflation.
If that's the boat you landed in, your best bet at this point is to move forward and focus on boosting your long-term savings in 2024. And these simple steps could set you up to grow your nest egg nicely over the next 12 months.
1. Snag your full employer 401(k) match
It's not a given that your employer will match funds you contribute to its retirement plan. But the reality is that many companies do offer some type of matching incentive to go along with their 401(k)s.
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It pays to find out what yours entails and snag that match in full. After all, it's easier to boost your savings when you have funds from your employer coming in.
That said, one thing to be mindful of is that some employers that offer matching dollars for 401(k)s also impose a vesting schedule. If you're planning to leave your job in the near future, you may not get your match or get it in full.
2. Save your full raise
Hopefully, your paycheck will be increasing in 2024, whether due to a performance-based boost or a general cost-of-living increase your employer is giving out. At this point, it's early enough in the year that you probably haven't seen a larger paycheck come in. So before you start getting used to having extra money, consider putting your entire raise into your 401(k).
Similarly, let's say you're going to be working a side gig this year that will put an extra $100 per week in your pocket. That's a raise of sorts, albeit one you may be hustling for even more. In that case, send an extra $400 a month to your 401(k) out of your regular paycheck -- then bank the $400 from your side gig and use that money as you need or please.
3. Sign up for an HSA your employer will fund
A health savings account (HSA) isn't a retirement plan in the same sense as a 401(k) because you can withdraw from an HSA at any time to cover qualified healthcare expenses. But because HSA funds don't expire, many people opt to treat their HSAs as retirement savings accounts.
To follow their lead, all you need to do is fund your HSA but leave your balance invested, rather than taking withdrawals as near-term medical bills arise. That way, you might have a large pile of money available for retirement healthcare expenses down the line.
Meanwhile, some employers have a practice of contributing to HSAs on workers' behalf. And unlike 401(k) matches, employer HSA contributions are sometimes made regardless of what you contribute yourself.
For example, your employer may be willing to put $1,000 a year into your HSA whether you contribute or not. So if your health insurance plan is HSA-compatible, it pays to open one of these accounts if there's free money involved.
You may have the goal of boosting your retirement savings nicely in 2024. Take these steps in the coming weeks to make that happen.
