10 Simple Money Moves to Help You Retire a Millionaire

Saving for retirement is one of the biggest financial challenges we'll ever face. Contributing money to a 401(k) or IRA every month is a good start, but that alone may not provide the income you need to cover all your expenses in retirement.

If you want the best chance of retiring comfortably, you have to take all possible steps to boost your retirement savings. Here are 10 options to consider if you haven't already.

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It's important to have a savings target in mind so you can gauge your progress to your goal. If you haven't already, figure out what you think you need to retire comfortably. Then, subtract money you expect to receive from Social Security, a pension, or other sources to determine what you need to save on your own.

Once you have a target in mind, you can figure out how much you should save every month to reach that goal. If it isn't feasible, you may have to rethink your retirement date.

ALSO READ: 3 Realistic Paths to a Millionaire Retirement

Try to boost your retirement contributions if you can afford to. You may have to reduce your spending in other areas to make this possible. Look through your bank and credit card statements for areas of overspending. Keep an eye out for any subscriptions you're no longer using, too.

Make sure your contributions don't exceed the annual limits for the retirement accounts you're using. In 2021, if you're under 50, you're only allowed to contribute up to $19,500 to a 401(k) and $6,000 to an IRA. Exceeding these limits will result in penalties. If you need to save more than this, consider other accounts, like a taxable brokerage account or health savings account (HSA).

In 2021, adults 50 and older are allowed to contribute an extra $6,500 to their 401(k) and $1,000 to their IRA. This brings their maximum contributions to $26,000 and $7,000, respectively. Taking advantage of these catch-up contributions is a great way to grow your nest egg quickly, especially if you got a late start on savings.

These contribution limits change periodically. If you plan to take advantage of them in future years, make sure you check what they are so you don't miss any opportunity to contribute more money.

Automating your contributions eliminates the risk that you'll forget to set aside money for retirement every month. Most 401(k)s should enable you to automatically defer a percentage of each paycheck for retirement, and many IRAs enable you to link a bank account and automatically transfer funds on a chosen schedule.

If the money's coming out of your bank account, make sure you set up the transfer for a time of the month when you know you'll have enough money in the bank account. This will help you avoid potential overdrafts.

ALSO READ: 4 Smart Moves Millionaire Retirees Made With Their 401(k)s

Many employers offer a 401(k) match to qualifying employees to help them save for their retirement. It's a limited-time offer because if you don't claim it before the end of the year, you lose it. That's why claiming your match should be your top priority if you qualify for one and can afford to contribute to your 401(k).

Check with your company's HR department if you're not sure how its matching system works. If you've been with the company for less than six years, you should also ask about its vesting schedule. This determines when you can keep your employer-matched funds if you leave the company. Quitting before you're fully vested could cost you some or all of your match.

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If you aren't happy with your job, consider switching employers, or if you're really ambitious, switch fields. You might be able to find something that pays more. This could enable you to set aside more money for retirement.

Don't just focus on salary, though. Look at other benefits, including retirement accounts, the presence of an employer-matching contribution, and insurance. If you'd been paying out of pocket for your health insurance, finding a job that offers insurance at a more affordable rate could also free up more cash for retirement.

All investments carry fees, though many people don't realize it because the money comes directly out of their retirement accounts every year. These fees eat into your profits, so it's crucial to keep them as low as possible.

Index funds are a great option for those looking for an affordable way to grow their nest egg. These are mutual funds or exchange-traded funds (ETFs) that mimic a market index, like the S&P 500. They often contain hundreds of stocks, so your money is diversified with a single purchase. And some of the best index funds only charge $3 per year for every $10,000 you have invested.

ALSO READ: Is Your 401(k) on Track for a Millionaire Retirement?

The right asset allocation can also help your retirement savings grow more quickly without exposing you to too much risk. The general rule of thumb is to keep 110 minus your age in stocks. So if you're 30, you'd keep 80% of your money in stocks and 20% in bonds. As you age, you gradually move more of your money into bonds to protect what you have.

Don't be tempted to make this move too early, though. Doing so could slow the growth of your savings, forcing you to set aside more money every month to reach your goal

An emergency fund might seem unrelated to retirement, but the two are actually intertwined. If you don't have an emergency fund and you face an unexpected expense, you'll have to divert money from your retirement savings to cover the costs. If you go into debt, it could be a long time before you can afford to save for retirement again.

You should keep at least three months of living expenses in an emergency fund. Six months is even better. Make this your top priority, even above saving for retirement, until you've reached your savings goal. Always replenish your emergency fund after you use it.

High-interest credit card debt can stand in the way of saving for retirement. It can also drain your savings prematurely if you carry it into retirement. It's best to take care of this before you leave the workforce, if possible.

There are a few ways to do this. You could make the minimum payment on all your cards and then put any extra toward the card with the highest APR first until the balance is paid off. Then, move onto the card with the next-highest APR, and so on. Or you could try a balance transfer card or a personal loan.

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If you've done most of the steps above, you should be pretty happy with yourself. You're doing a good job of setting yourself up for a comfortable future. But now's not the time to take it easy.

Review your retirement plan at least once per year to make sure you're still on track, and make adjustments as needed to keep up with your changing lifestyle and retirement goals.

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