We don’t usually talk about this here on our blog. But the markets have been in a turmoil since COVID. They crashed then they bounced back hard then they crash only to come back up again. Who knows were they will go next. I’m sure a lot of you feel your investment portfolio is going nowhere and need to boost your retirement funds. Even bonds are losing money.
A retirement fund is an important thing to have. When you are old enough to retire, you want to make sure you have enough money to live comfortably without having to work much at all and without inflation eating away at it.
Hopefully, you will be able to save up enough during your working years to do this, but it’s never too late to start. Here are ways to quickly boost your retirement fund if you are a homeowner in Connecticut and maybe be able to spend some relaxing years living comfortably.
Your 401k and Roth IRA
You may already have a 401k set up with your employer or you have 1 or 2 accounts with your previous job. But are you taking full advantage of your current employer’s match program if it’s available? You definitely want to put as much as you can in your 401k to get the full benefit of free money! Some employers match up to 50% of contributions up to a certain amount, and some may match 100% or make deposits even if you don’t! This will also save you additional paycheck taxes since the 401k funds are taken out of your check before taxes. It’s free money that you are missing out on!
In addition to the 401k, you can have a Roth IRA account. Your money will be taxed now of course, but not later in retirement when it matters most. Make sure to max out your Roth IRA contributions to take advantage of this saving opportunity! Contributing the maximum allowed amount will quickly boost your retirement fund. If you are over 50, you are allowed to contribute a little more into your accounts, also referred to as “catch up” savings. You don’t want to be at retirement suddenly realizing you made a huge mistake not contributing when you were younger.
Pay Off Debt
Paying off outstanding debt is a great way to boost your retirement fund. Don’t make the mistake of only making the minimum payments on accounts. This will surely be eaten up by interest and fees and will slowly be applied to your principal balances. Making large lump payments to bring down your overall balance will save you thousands in the long run, and leave you more money to contribute to your retirement fund.
High rate debts like personal loans and credit cards cost you the most. Some have 20 to 50% interest rates meaning you are barely paying down what you owe because you are making almost all of it as interest to the lender. Tackle those first so you can free up more money to pay off other debts. With the high interest rates we have now its saving you more money to pay off high rate debt than keeping it in savings. This is called a snowball debt payoff. Check out this handy calculator to do it.
Once you have your balances paid off, commit to paying off the entire balance every month. Not only will this save you money, but this will also surely improve your credit score!
Get a Second Job
Another way to quickly boost your retirement fund is to take on a second job or a side gig. Since your current job can cover all of the necessities now, your second job income can go straight to your retirement fund. You may lose some of your spare time, and it can be stressful working 80 hours a week but just think of your retirement! It’s easier to work hard when you are younger when your body can take it.
A second job doesn’t always have to be with an employer. You can step out and be an entrepreneur. Start a business of your own. There are a number of gig economy platforms like Uber or DoorDash that will pay you to drive people or food around. Or you can start a cleaning service, be a personal trainer, teach people to sing or play an instrument. You can set your own rates and make your own hours so you don’t have to do a full 80 hours a week.
You will have plenty of money and free time when you are older to take those vacations and travel. If you save up enough, you might even get to retire early like with the FIRE strategy!
Sell Your House
If you are a homeowner in [market_state], the easiest and quickest way to boost your retirement fund with a big chunk of money is to sell your house! You may even be able to negotiate the buyer paying a majority of the fees to have more money to put aside. Take into consideration downsizing now to save for the future. You can also take advantage of the low-interest rates when you are looking for a loan for your new home. You can put thousands of dollars away to start earning interest now and find a different house to live in, and save extra money with the lower interest rates. You will also save in some unexpected places, like the electric and water bill and the actual time it takes to clean your house. You might be able to find a smaller, more energy-efficient home closer to your work and save you time and gas money every day!