10 Ways to Get Your Retirement Savings Back on Track

The past couple of years have done a number on ... well, just about everything. The short-term financial crisis, massive layoffs, and recession caused by the pandemic are now threatening to exacerbate a long-term financial crisis -- that of seniors retiring on insufficient funds.

There isn't a simple solution, but there are some things you can do to attempt to get your retirement plan back on track if you're worried. Here are 10 ideas to get you started.

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The first step is always to take stock of where you are so you know how much further you have to go. Start by making note of how much money you have in retirement savings and how much you're contributing per month at the moment. If you have any outstanding 401(k) loans, make note of these as well.

Compare what you've got to how much you think you'll need for retirement and figure out how much you should ideally be saving per month going forward. Then, try to increase your retirement contributions, if possible, to get yourself back on track.

ALSO READ: 3 Surefire Ways to Increase Retirement Savings

While you're taking a look at your retirement plan, it's a good time to evaluate your budget, too. Look through all your bank and credit card statements from the past year or so, and see if there are any areas you can reduce your spending. Put any extra money you're able to free up toward your retirement savings.

Debt repayment might seem unrelated to retirement, but the two often go hand in hand. Once your debt is paid off, you won't have those monthly payments anymore and you can put that money toward retirement instead.

High-interest debt and 401(k) loans should be your first priority. You may want to work on paying these back before you start making new contributions to your retirement plan. Consider a personal loan or a balance transfer credit card to help you get your debt under control.

A 401(k) match could be worth hundreds or even thousands of dollars today, and it could easily grow into tens of thousands of dollars after being invested for a few decades. That can take a lot of the pressure of retirement savings off your shoulders.

Talk to your company's HR department if you're unsure how it's 401(k) matching system works. Inquire about how much of your match you've already gotten for the year if you're not sure. Then, try to increase your 401(k) contributions for the rest of 2021 to get your full match.

ALSO READ: One Number That Will Make You Rethink Your Retirement Savings Goals

Automate your contributions, if you haven't already, to reduce the odds of forgetting to make them. Most 401(k)s are set up to automatically withhold money from your paycheck, and many IRAs enable you to link a bank account and set up an automatic transfer schedule.

Just make sure the money is set to be taken out at a time when you have sufficient funds in your account. Right after you get paid is usually a good time to do it.

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Adults under 50 may only contribute up to $19,500 to a 401(k) in 2021 and $6,000 to an IRA. But adults 50 and older are allowed to contribute an extra $6,500 and $1,000, respectively, in catch-up contributions. This is a great way for older adults who are behind on their retirement savings to catch up.

These limits change annually, so it's important to keep an eye on them every year. For example, 401(k) contribution limits are set to rise to $20,500 for adults under 50 and $27,000 for adults 50 and older in 2022. IRA contribution limits will remain the same next year.

Investing conservatively can feel like the smart move because you're better shielded from loss. But it also means your investments grow more slowly. This can make it more difficult for you to save enough because you'll need to rely more upon your personal contributions to make up for less investment earnings.

The typical rule of thumb is to invest 110 minus your age in stocks. So if you're 40, you'd invest 70% of your savings in stocks and 30% in bonds. Over time, you gradually move your money to safer investments. But you do so slowly so you can take advantage of the higher return stocks typically offer.

ALSO READ: 3 Retirement Savings Moves to Avoid at All Costs

Health savings accounts (HSAs) weren't designed for retirement savings, so few people think of stashing their money there. But it's actually a pretty great option for retirement funds. Money you put in an HSA reduces your taxable income for the year, and if you use the funds for medical expenses, you'll never pay taxes on them.

In order to contribute to an HSA, you need a high-deductible health insurance plan. This is one with a deductible of $1,400 or more for an individual or $2,800 or more for a family in 2021. Individuals who qualify may contribute up to $3,600 in 2021, while families may contribute up to $7,200. These limits rise to $3,650 and $7,300, respectively, in 2022.

The Great Resignation is still underway, and some employers are offering unprecedented bonuses to draw in and retain talent. If you're not satisfied with your current job, it might be time to consider seeing what else is out there.

Don't just focus on salary, though. Look at the retirement account it offers, whether there's a company match, and whether it offers health insurance or other benefits that could reduce your monthly out-of-pocket costs. Then, put what you're saving toward your retirement.

Putting off retirement isn't an ideal solution for most people, but there's no denying it's effective. By delaying retirement, you're reducing the length and cost of your retirement while giving yourself more time to save. Your existing savings also has more time to grow before you must begin drawing upon it.

But it's important not to rely solely upon this strategy because people can't always work as long as they plan to. Sometimes, an unexpected illness or injury forces them to stop working. That's why it's important to save as much as you're able to while you're young even if you plan to consider working for the foreseeable future.

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Saving for retirement is a challenging task at the best of times, and we're most certainly not living in the best of times right now. So do your best to put the above tips into practice, but don't be too hard on yourself if you can't save as much as you'd like. Come up with a strategy, but be willing to adjust it as your circumstances change.

Retirement planning was never intended to be a one-and-done thing. As you grow and change, your retirement plan will also. Doing these periodic checkups where you look for new ways to boost your savings is the best way to keep yourself on track.

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