Boost Retirement Savings Now For A Healthy Nest Egg

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Behind in your retirement savings? I was, too. It’s a scary moment when you realize you haven’t saved enough (or even started to save) money for your retirement. Maybe you never got around to contributing to your 401(k), or maybe your money story wasn’t the greatest and you feel guilty about it.

Honestly, it doesn’t matter what led up to this moment. What matters is the action you’re willing to take to boost your retirement savings now.

In this post, I want to share 5 things you can do today to help catch-up your retirement savings. These are the steps I took to get my own retirement savings back on track after a late start. There is just one thing I want to mention first . . .

It’s Hard to Boost Retirement Savings When You’re Bogged Down by Guilt

First, let’s address the elephant in the room. We’ve all made mistakes. Let go of the past and put your energy into what you can do today to improve your future. To boost retirement savings, I had to let go of the guilt I felt from my past money mistakes.

That’s easier said than done.

I was extremely embarrassed about the mistakes I’d made and found myself struggling with overwhelming feelings of depression and inadequacy. 

Yet, worrying about what people might think of me or my past choices wasn’t going to help me reach my goals. Neither was replaying all the negative tapes in my head about how foolish my husband and I had been with money. Before I could even start to boost my retirement savings, I had to make peace with myself over past mistakes.

How to Forgive Yourself

Put your past in perspective by reminding yourself that you did the best you could at the time, and now that you know better, you will do better.

I had to remind myself that crisis equals opportunity. The difficult times I experienced as a result of mismanaging money led me to recognize what I truly valued. This helped me redefine my goals and change my behavior to match my values.

To forgive myself, I admitted that I’d made mistakes and decided to stop beating myself up over them. With the recognition that I could grow and improve, I was ready to let go of the past and start over. And the good news is that you can, too! Yes, it’s harder on a low income, but it can be done with some outside of the box thinking.

Once you’ve cleared the emotional slate, it’s time to get started on your journey to boost retirement savings. Yes, you can catch-up your retirement savings, even after a late start. Check out these simple steps and get started today!

5 Steps To Help Boost Retirement Savings In 2023

Here are 5 steps that you can take today to help boost your retirement savings. Start with just one step if that’s all you can do. Take on another step as soon as you can. The important thing is to get started.

Step 1:  Focus on paying down debt.

We were never able to save money for retirement (or anything else) when we were burdened by debt. It was only after we became debt-free that we had room in our budget to even think about saving for retirement. Getting out of debt is key.

Feel like there’s no room in your budget to pay more on debt than you already do? Figure out how to cut expenses or raise your income to free up money to pay off debt faster. Even a hobby can be turned into money-making opportunity for paying down debt.

Dave Ramsey’s books and radio program gave me a ton of ideas when we were digging our way out of debt. We sold all kinds of stuff on Craigslist! Dave says that even delivering pizza a couple nights a week can bring in an extra $1,500 per month to help pay down debt.

Once the debt is gone, turn your attention to saving.

Step 2:  Make saving automatic.

You’ve heard that you should pay yourself first, but how do you do it on a regular basis? The best way is to set up a system of automatic deductions from your paycheck. By diverting money into savings before you ever see it, you are more likely to be successful in your efforts to boost retirement savings.

Funds can be diverted from your paycheck to your retirement accounts. You can also set up automatic payments from a checking account to Traditional or Roth IRAs, or even to a regular brokerage account.

When I started contributing to my retirement account at work, I signed up for automatic deductions from my paycheck and I didn’t even miss the money that was taken out! I really didn’t believe that was possible, so I started small. With every raise, I increased the amount.

Eventually, I decided to bite the bullet and started contributing the maximum allowed to help boost retirement savings.

Step 3:  Go big or go home.

If you have a 401(k) or other retirement account available through your job, max it out! Everyone will tell you to at least contribute enough to get the employer match, as it’s free money. However, the idea is to catch-up retirement savings, so do whatever it takes to max out those tax advantaged accounts. If that means taking on a side job or slashing expenses to free up money for investing, do it!

Speaking of investing, don’t worry about trying to figure out what companies to invest in, just buy them all! Yes, we’re talking about index funds. Vanguard’s total stock market index (VTSAX) is the favorite of the Financial Independence/Retire Early (FIRE) crowd.

But if your employer doesn’t offer a total stock market index fund or even an S&P 500 index fund to choose from, don’t worry, you may be able to replicate it. JLCollins described a strategy on his blog for choosing funds that will mimic VTSAX. Look for funds with the lowest fees.

Step 4:  Take advantage of catch-up contributions.

Catch-up contributions have been (and continue to be) a huge help in catching up my retirement savings. If you’re working and over 50 years old, you can use this strategy to your advantage.

That’s right, if you’re over 50, the government wants to help you boost retirement savings!

Uncle Sam allows the older crowd to contribute more money to qualified retirement plans. This means you can put more tax advantaged money into a 401(k), 403(b), or 457 deferred compensation or defined contribution retirement account to help catch-up retirement savings. Catch-up contributions are also allowed for traditional or Roth IRAs if you’re over 50.

2023 Regular Contribution Limits & Over 50 Catch-Up Contributions:

Retirement Plan	Contribution Limit	Catch-Up	Total
401(k)	22,500	7,500	30,000
403(b)	22,500	7,500	30,000
457(b)	22,500	7,500	30,000
Thrift Savings Plan	22,500	7,500	30,000
Traditional IRA	6,500	1,000	7,500
Roth IRA	6,500	1,000	7,500

Insider Tip:  Public employees who are 50+ may have the potential to participate in a powerful catch-up strategy. There is a special 457(b) deferred compensation plan catch-up provision for government workers.  

If you’re behind in your retirement savings, are age 50+ and haven’t previously maxed out contributions as a public employee, you may be able to contribute up to $45,000 per year in the 3 years before you reach normal retirement age. Normal retirement age is 55 years old at my job.

Check with your employer’s HR department to see if you qualify for the 457(b) deferred compensation plan catch-up provision. It’s the perfect way to catch-up retirement savings after a late start.

Honestly, I was afraid I would not be able to defer so much of my income, but with money coming in from my side job and the disability and retirement income my husband receives, I decided to give it a try. We found a way to make it work.

If I was job searching today, I’d look for a employer who offered a 457(b) deferred compensation plan. This might be with a county or state government agency or at a school.

Remember Dave Ramsey’s comment that you could make $1,500 a month delivering pizza two nights a week? That adds up to 18,000 a year, which would go a long way toward finding the extra money to max out your retirement accounts!   

Step 5:  Keep working, at least a little longer.

This might be the last thing you’d expect to hear if you’ve been reading FIRE blogs. Afterall, FIRE stands for Financial Independence, Retire Early.

Although the FIRE movement inspired me to find creative ways to catch-up retirement savings, as a late-saving baby boomer, I realized I’m not going to be able to retire super early. I believe it’s still possible to reach financial independence, however. Working a little longer is going to help me do it.

Each additional year that I work allows me to save more money in tax-deferred and regular investment accounts. The longer I stay at my current government job, the larger my pension will be, too. I haven’t worked at this job long enough to have a huge pension, but any pension amount I do get means I won’t have to save as much other money to boost retirement savings.

Pensions are rapidly becoming a thing of the past, putting all the burden of building up a healthy retirement nest egg solely on the individual. However, if you’re thinking of changing jobs to increase your income, consider applying for a government position that still offers a pension.

I can’t stress this enough. If you are looking for a new job, try to find one that has a 457(b) plan or a pension. Some places offer both, but again, these are usually government or teaching jobs.

Be sure to work at least 5 years to become vested (or whatever the minimum is for that job), so you qualify for the pension!

Final Thoughts

In summary, please remember we’ve all made mistakes with our money. Don’t let your past control your future. Let it go and move on.

Implementing any one of these 5 steps right now can make a difference in your ability to catch-up your retirement savings. Do all five and you can supercharge your savings! There’s still time to save money and grow a healthy nest egg.

Question: What are you doing to boost retirement savings? Please share in the comments below.