The first quarter of a new year is always a great time to hit the ground running on your goals. If beefing up your retirement savings is at the top of your list for 2024, you'll have a great opportunity to crush your goals if you develop a game plan now.
You have until the end of the year to contribute to employer-sponsored retirement plans but you can tuck away cash into a 2024 IRA until April 15, 2025. At this point in the year, you're still in a position to max out your retirement accounts if you've already taken care of the financial basics like building an emergency fund and tackling debt.
But no matter what your financial situation looks like right now, saving more money can be a struggle if you don't have wiggle room in your budget. Here are a few moves you can make to stretch your dollars and boost your retirement savings this year.
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1. Check your finances
If you receive a salary, you most likely earn a fixed amount of money every month. In this case, you might have to pick up a side gig to earn more money if your regular job isn't enough to help you save. You may also receive bonuses, commissions, or other performance rewards but since they aren't guaranteed, you don't want to count on them to meet your retirement savings goals.
So if you don't have the flexibility to increase your income at work, reviewing your expenses can make a huge difference. First, see if you can spot any opportunities to trim any unnecessary expenses. For example, you could cut back on fancy dinners, entertainment, or daily drink habits to add more money to your budget.
If that's not an option, you can always negotiate the expenses you already have. Let's say your commute has changed and you work from home. You might want to consider switching car insurance companies to see if you can snag a better deal.
Reviewing your finances every month can also help you identify your top spending categories. For example, you might want to consider the best gas and grocery credit cards if those are essential expenses in your budget. That way, you can get rewarded with cash back for the purchases you already make. But make sure your credit is in good shape and that you're able to pay your credit card bills every month to reap the full benefits of this strategy.
2. Put your retirement savings on autopilot
It's easy to brush aside your retirement savings plan when other goals pop up. So you want to reduce any temptation that can creep in by putting your savings goals on autopilot.
Your employer makes it easy to automate your 401(k) savings since your contributions are taken out of your paycheck before the money hits your bank account. For 2024, you can contribute up to $23,000 to a 401(k) if you are under 50 and up to $30,500 if you are 50 and older. You can change how much is taken out of your paycheck to fund your 401(k) at any time during the year.
If your employer chips in a 401(k) match, your contributions to your retirement account can earn you free money from your employer. Let's say your employer offers a dollar-for-dollar match up to 6% of your salary. So if you earn $100,000 at work, you can put $6,000 in your account and receive another $6,000 from the match.
If you have a Roth IRA (individual retirement account), you'll contribute to the account with after-tax dollars. You can contribute up to $7,000 to an IRA, which ends up being about $583 per month for 12 months. That's less than $150 per week or about $21 per day. You can contribute an extra $1,000 to an IRA if you are 50 or older. But if you're still trying to beef up your emergency fund, start with lower recurring contributions to a Roth IRA and increase the amount after you reach other financial goals.
By automating your contributions, though, you increase your chances of hitting your retirement savings goals. If you get extra money during the year, you can throw it in your retirement accounts to reach your goals faster. You'll be surprised by how much you end up having in your retirement account at the end of the year if you get the ball rolling on these strategies now.
