If you’re nearing age 65 and the amount in your nest egg makes you nervous, you may have to jumpstart your retirement savings plan. Even if you’ve been saving it still might feel overwhelming, especially if you fear your individual retirement accounts (IRAs) or 401(k)s won’t be able to compete with your cost of living — regardless of your estimated Social Security benefits.
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Fortunately, Dave Ramsey is a financial expert who knows his way around achieving retirement savings goals. The Ramsey Solutions’ State of Personal Finance Study indicates that more than half of Americans aren’t investing for the future, with 60% feeling behind on their retirement savings goals. The key is to take action now, despite the past, and carve out a better future.
According to Ramsey, here are the five fastest ways to catch up on your retirement savings.
Maximize Your Retirement Accounts
Your security in retirement heavily depends on how you prepare your finances before you reach full retirement age. One of the best ways to move the odds in your favor is to take advantage when your company offers an employer match to contributions you make and max those out. Here are some key takeaways:
- You should almost always utilize employer-sponsored retirement plans like 401(k)s, 403(b)s, and other options.
- For 2025, the 401(k) contribution limit is $23,500, with an additional $7,500 as a “catch-up contribution” for those aged 50 or older.
- Combine this with contributions to a traditional IRA or Roth IRA, which can be up to $7,000 for those under 50 and $8,000 for those over 50, to create comprehensive retirement savings.
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Review and Trim Monthly Budgets
Evaluating your monthly budget to identify potential savings not only creates better spending habits, but also sets you up for success with your long-term savings goals.
A good start to lowering your expenses is to cancel unnecessary subscriptions and memberships you don’t use but may have on autopay. Small sacrifices today can lead to substantial retirement savings tomorrow.
Increase Your Income
Increasing your income doesn’t necessarily mean searching for a new job, but rather creating supplemental or passive income streams for yourself. This can mean selling stuff online through Facebook Marketplace or participating in affiliate marketing programs on your blogs, websites or social media platforms. Here are some key ways to get on the right path to boosting your cash intake:
- Leverage your primary wealth-building tool — your income.
- Explore side gigs or part-time opportunities to supplement your earnings.
- Consider renting out extra space in your home to generate additional income.
Leverage Your Home Equity
You can focus on paying off your mortgage to eliminate a significant expense in retirement. Housing is one of the biggest costs in your budget, especially if you are still renting on a fixed income.
The equity in your home is a powerful wealth-building tool so make sure you leverage it wisely. By prioritizing both mortgage payments and retirement contributions simultaneously you can accelerate financial growth exponentially.
Delay Retirement
Ramsey Solutions also outlines reasonable arguments for waiting to collect your Social Security and postponing retirement for as long as possible. Though this may not be what you want to hear, it is definitely something to consider when factoring in what you want the quality of your retirement to be. Consider the following reasons for delaying your retirement, as the key is to act now and stay committed to your long-term financial goals:
- Extending your working years until age 70 will get you the maximum amount of Social Security benefits per month.
- This provides more time for compound interest to work its magic and significantly boost your retirement savings.
- While not an option for everyone, working longer can be a prudent choice for both mental and financial well-being.
- Remember, it’s crucial to take control of your financial future. Whether you’re 40, 50 or beyond, implementing these strategies can make a substantial difference in your retirement savings.
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This article originally appeared on GOBankingRates.com: Dave Ramsey: 5 Fastest Ways To Catch Up on Retirement Savings
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