Saving enough to fund 30+ years of retirement can be tough, especially when there are lots of other demands on your cash flow. Here are some tips that can help you build the nest egg you need:
- Minimize the fees you pay on mutual funds and/or ETFs you hold within your accounts. Consider using Vanguard mutual funds and ETFs to achieve this objective.
- Make catch-up contributions (currently $6,000) if you’re age 50+.
- Contribute at least the minimum amount needed to get full matching contributions from your employer.
- As account contribution limits increase over time, increase the amount you sock away.
- Don’t get divorced. Getting divorced may subject your retirement plan balance to a QDRO (Qualified Domestic Relations Order). A QDRO can decimate your retirement savings.
- Pay your federal taxes on time and in full. Otherwise, Uncle Sam could start withdrawing the amounts you owe him from your retirement accounts.
- Work for your employer until their contributions to your account vest. At that point, you’ll own them and be able to withdraw them from your account.
- Hire a qualified professional (like a CFA® charterholder) to manage the investments within your retirement plan accounts. New software programs allow portfolio management pros to manage virtually any type of retirement account on your behalf.
- Ensure you’re taking the right amount of risk in your retirement accounts. See the previous bullet on CFA® charterholders.