6 Ways to Save More for Retirement

Enjoying your retirement years is all about having a savings and spending plan during your working years. Many Americans, though, aren't sure that their current savings habits will get them where they want to be. These six ideas can help you save more so you can maximize your golden years.

1. Start Planning Now

“Unfortunately, many people wait until they are almost ready to retire to start planning for retirement,” said Patricia Wenzel, president of the National Association of Plan Advisors in an interview with CNN Money. The early you get started, the better. One idea is to pick a desired retirement age, and then work backwards to figure out whether you need to up your savings rates or cut your spending.

2. Save as Much as You Can

Most experts suggest saving anywhere between 10 percent to 15 percent of your gross salary, which includes contributions you may receive from your employer. Saving more is better, if you can afford to, of course. And once again, timing matters: the sooner you start saving, the more time your money has to potentially grow.

3. Don't Just Save It, Invest It.

The power of compound interest is remarkable. Stashing your money in a regular savings account will earn you next to nothing, whereas investing it can earn you a substantial amount. You can invest by putting money in a 401(k) plan at work, where you can get matching contributions if your employer offers them. Other investment options include individual retirement accounts (IRAs), health savings accounts (HSAs), and annuities. Your financial advisor can help you decide what investing methods may fit you best.

4. Watch Your Spending

Cutting back on spending is another way to save. Take the time to set up a budget and then stick to it. When you sit down and really examine your monthly spending, you might be amazed to see where your dollars go, and find expenses you could easily cut back on or even eliminate. 

5. Pay Off Debt Before Retiring

Carrying debt into retirement means you’ll probably have to use retirement funds to pay it off. Paying off big ticket items like your house, cars, student loans and credit cards before you retire helps preserve your nest egg longer.

6. Understand Withdrawal Rules

Withdrawing too early from retirement accounts can lead to costly penalties and income taxes, which only eat away your funds. There are different withdrawal rules depending on account type and your age, so speak with your financial advisor in the years and months leading up to retirement so you don’t make a mistake by withdrawing from the wrong account too early.