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One out of every three Americans has zero dollars saved for retirement, according to a GOBankingRates survey. The survey also found that 75% of individuals over 40 are behind on their retirement savings. If your plan up until now has been avoiding a plan, it’s time to rethink your strategy. Here are 7 ideas for how to catch up retirement savings.

1. Maximize your contributions.

Are you taking full advantage of the savings accounts you do have? The best way to catch up on retirement savings is to contribute the maximum amount the accounts allow.

401K MAXIMUM CONTRIBUTIONS:

In 2017, employees can put up to $18,000 of their income into a 401K (called employee elective deferrals). If you’re over the age of 50, you can contribute $6,000 more in a 401k catch up contribution.  The overall contribution limit is $54,000, which can include employer match contributions.

Tip from the experts

Are you taking full advantage of your employer’s 401K match program? One-fourth of employees in the U.S. aren’t saving enough to take full advantage of the program. They are missing out on an average of $1,336 per year in FREE money! [Source]

TRADITIONAL AND ROTH IRA MAXIMUM CONTRIBUTIONS:

The 2017 contribution limit for those under 50 years is $5,500. If you’re over 50, you can add an additional $1,000 in catch up contributions. Even if you don’t start saving until age 40, it’s not too late to take advantage of the maximum contribution. By the time you’re 65, your annual contributions of $5,500, with an estimated 7% return, will net you $316,387.

Get more information about maximum contributions and other FAQs directly from the IRS.

2. Open multiple types of retirement accounts.

Don’t just use your employer’s 401K. Open an IRA account as well! There are two main types of IRAS, traditional and Roth. The main difference between the IRAs is that a traditional IRA is tax deferred and the Roth is not. Your contributions to the traditional IRA are pre-tax and then you pay tax once you withdrawal your funds. Your contributions to the Roth IRA have already been taxed, and will not be taxed again once you withdrawal them.

3. Focus on ridding yourself of high-interest debt.

Debt not only prohibits you from contributing more money to your retirement savings, but if you carry it into retirement, you’ll end up using savings to pay off that debt. That means your monthly budget will be taken up by high-interest debt payments instead of normal living expenses.

Discover how to use the debt snowball method to eliminate high-interest debt.

4. Put surplus money directly into savings.

You don’t have to adjust your monthly budget to add more to your savings. Just be on the look-out for additional opportunities. Whether it’s a tax refund, a bonus at work, or just a gift, put extra money straight towards retirement. You won’t miss it, and your future self will thank you.

5. Buy disability coverage now.

Don’t just prepare for the best-case scenario, also prepare for the worst. Disability insurance can protect you and a portion of your income during retirement. The chances of having a disability increase with age. In fact, this report by the Institute of Disability estimates that 35.4% of adults over the age of 65 have a disability. Getting coverage now will help greatly during retirement if you’re part of that 35%.

6. Downsize your home and living expenses.

If you can’t save more, spend less. If you have decent equity in your home, you could make a profit by selling and moving to a less expensive home. You can buy the new home outright without taking on debt, and you can use the profit to catch up on retirement savings. A smaller home also means smaller bills.

7. Delay retirement.

Delaying the age you retire means you have more time to contribute to savings, and less time to spend those savings. Plus, more working years will add to your social security check.

Remember the calculations we did on the IRA contributions earlier? Saving the maximum amount from age 40 to 65 resulted in $316,387. But if you hold off on retirement until age 69 – you’ll save an additional $120,542 in four years.

WHAT WE DON’T RECOMMEND YOU DO

Making sure you have enough money saved for retirement is stressful. But make sure you don’t put yourself in a financially worse situation in your rush to prepare. If someone is trying to sell you a plan that sounds too good to be true, it probably is. Be careful with predatory lenders selling you items like reverse mortgages. If you need advice, just reach out to a financial planner to figure out if something is a good idea. Now use these seven strategies to catch up on your retirement savings!

Be mortgage-free for retirement.

Eliminate debt in retirement by restructuring your finances now. Our specialized Home Stretch Final Mortgage is designed to pay off your home within the next 5-10 years. Get more information now.