10 Retirement Savings Tips They Don't Teach You in School

There's a laundry list of life skills we probably ought to be taught in school but aren't. Near the top of that list is retirement planning -- something everyone planning to one day leave the workforce must do. It's a monumental feat, usually requiring at least $1 million in personal savings.

You need a strategy if you want to get there as quickly as possible. Here are 10 tips you can use to boost your savings and feel more confident in your retirement plan.

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Though it may surprise you, there are other financial goals you should put ahead of retirement savings in order to make retirement saving easier once you begin. The first thing is to build up an emergency fund containing at least three to six months of living expenses. Without an emergency fund, your retirement plan could get derailed when you're faced with an unexpected expense.

You should also work on paying off high-interest debt as this is costing you more than the rate of return you'll probably earn on your investments. Consider a balance transfer card or a personal loan. Once you get these two tasks checked off your list, you can begin saving for retirement.

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Your investment return depends, in part, on what you're paying in fees. Minimizing your costs is key to keeping profits high and reaching your savings goals more quickly. You may not be able to do much about your retirement plan's administrative costs, but you may be able to reduce your investment fees by choosing your investments carefully.

Index funds are a great option for most people because they tend to offer solid returns and their fees are very low. These are bundles of stocks you purchase together that mimic market indexes, so they also enable you to diversify your portfolio in a single purchase.

How much you'll owe in retirement taxes depends partially on how much you spend annually and partially on where your money is coming from. Contributions to tax-deferred retirement accounts, like most 401(k)s and traditional IRAs, reduce your taxable income for the year, but then you owe taxes on your withdrawals. Roth contributions don't give you a tax break this year, but they offer tax-free withdrawals in retirement.

Think about which type of account makes the most sense for your retirement savings. You can also keep some money in each type of account, but you should favor the one that makes the most sense for you. Tax-deferred accounts are better choices if you think you're in a higher tax bracket today than you will be in retirement, while Roth accounts are better for those who think they're in the same or a lower tax bracket now than they will be once they retire.

Stocks offer greater earning potential than bonds, but they're also more volatile. If you want to grow your wealth without putting what you have at too much risk, you need some of both in your portfolio. A good rule of thumb is to keep 110 minus your age in stocks. For example, a 40-year-old would have 70% of savings in stocks and 40% in bonds.

Keeping a larger percentage of your savings in stocks when you're younger enables you to capitalize on the high returns from stocks, and if you experience any losses, you'll have time to recover before you have to rely upon your savings. As you age, you shift more of your money into bonds to help protect your nest egg.

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A 401(k) match is a bonus some companies give to employees, but only if they contribute money to their 401(k). How much you'll get depends on your company's matching formula and your income. Check with your employer if you're not sure how yours works.

Unless you need your whole paycheck to cover your expenses, you should contribute at least enough to your 401(k) to get your full match every year. It will help jump-start your retirement savings and could be worth several thousand dollars per year.

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While retirement accounts like 401(k)s and IRAs are a great place to stash your retirement savings, they're not your only options. If you max these out, you can also put money in a taxable brokerage account. It doesn't offer the same tax breaks as a retirement account, but it also has fewer limitations on what you can invest in and when you can withdraw funds.

A health savings account (HSA) is another great place to keep retirement savings. You can contribute to one of these as long as you have a health insurance plan with a deductible of $1,400 or more for an individual or $2,800 or more for a family. Contributions reduce your taxable income this year, and medical withdrawals are free at any age.

Married couples with only one worker can still put money aside on behalf of the nonworking spouse through a spousal IRA. This is a regular IRA that the working spouse contributes to on behalf of the nonworking spouse. The only rule is that the working spouse must have earned enough income throughout the year to cover their own retirement contributions and any contributions to the spousal IRA.

This is a great strategy to help married couples save for retirement more quickly, especially if they've bumped up against the annual IRA contribution limits in the past. You should note that spousal IRA funds belong to the person whose name is on the account, so if the couple splits, the nonworking spouse will keep that money.

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Once you turn 50, you're eligible to make catch-up contributions to your retirement accounts. While adults under 50 are only permitted to contribute up to $19,500 to a 401(k) and $6,000 to an IRA in 2021, adults 50 and up may contribute up to $26,000 and $7,000, respectively.

Contributing more every year is a smart way to grow your savings quickly, especially if you're getting a late start on retirement savings. These contribution limits are updated periodically, so be sure to check them every year to see if you're eligible to set aside even more.

When you sign up for Social Security has a huge effect on your benefits and possibly on your spouse's as well. Workers can either claim benefits on their own work record, if eligible, or claim a spousal benefit on their spouse's record. This is up to 50% of the spouse's benefit at their full retirement age (FRA). Starting early decreases your benefit, while delaying benefits past your FRA increases your checks.

Work with your spouse to determine when it makes the most sense for each of you to sign up. When both spouses earn a similar amount, it's usually best for both to delay benefits as long as possible if they can afford to do so and believe they'll live into their mid-80s or beyond. When one spouse significantly outearns the other, it's more important for the higher earner to delay if the couple wants the most money overall.

Once you have an emergency fund and you've paid off your high-interest debt, you should start saving for retirement as soon as possible. The longer your money remains invested, the more it will grow over time, assuming you've invested wisely. More investment earnings means you won't have to contribute as much money on your own to reach your goal.

Even if all you can set aside is $20 a pay period, it's a start. It will help you build the habit of saving for retirement, and hopefully you can gradually increase your contributions over time.

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We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

While the tips we've discussed here can help you get off to a great start with your retirement plan, there's always more to learn when it comes to investing and retirement planning. Being a perpetual student is the best way to develop your skills as an investor and build confidence in your retirement strategy.

Your retirement plan isn't going to look like anyone else's because you have your own goals and timeline, so you have to build a custom plan that works for you. With practice, you'll grow more skilled at choosing investments and adapting your plan over time to keep yourself on track for your dream retirement.

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