According to a recent study by Bankrate, 52% of American workers report that they feel they are behind on retirement savings. Only 16% feel that their retirement savings are where they should be, with 20% of respondents saying that they don’t know whether they are on track or not. Even more concerning is that according to CPA Practice Advisor, 57% of young Baby Boomers and 63% of Gen-Xers report being behind. As these generations are the closest to retirement, this raises some major red flags.

Having adequate retirement savings is a must for a peaceful and stress-free third act. However, in the day-to-day of working, paying bills, and unexpected expenses, it is easy to put your retirement savings plan on the back burner. Since time is such an important factor in growing your retirements savings, it’s imperative to start as soon as possible and make regular contributions. Below are some tips to help you maximize your retirement savings.

Maximize your contributions to your employer-matched 401K program

If your employer matches a percentage of what you contribute to your retirement plan, you should make sure that you are putting in the maximum amount that will be matched. While upping your retirement savings percentage may be uncomfortable in the short-term, not doing so is like turning down free money!

Supplement your 401K plan with an IRA

You may also want to supplement your 401K plan with an IRA account. Contributing to a traditional or Roth IRA plan ensures that your money can grow tax-free while you wait for retirement.

Save 10-15% of your income for retirement

Overall, you should aim to save between 10 and 15% of your income for retirement. While this may seem like a large number at first, the comfort that these savings will bring you later in life is well worth the temporary sacrifice.

Avoid pulling funds out of your retirement accounts early

Once you’ve begun to seriously save for retirement, it can be tempting to “borrow” from your retirement accounts prematurely, especially if you encounter a major unexpected expense such as unforeseen medical bills or unemployment. However, pulling money out of your retirement funds before you retire is one of the worst things you can do for your future. Between the taxes you have to pay on your withdrawal and the 10% penalty you may be subject to, borrowing from your retirement savings is a bad value and can be a permanent setback to your savings goals, as it’s unlikely that you will be able to make up the gap in the future.

Being behind on retirement savings can feel stressful, overwhelming, and even shameful for some. Rather than dwelling on the negatives on not being where you’d like to be, it is best to focus your energy on starting where you’re at immediately. After all, the best time to start is now!

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