When you start planning for your retirement, it is best to start saving early, as you can benefit from compound interest. However, even if you haven't started or started late, that isn't a problem. There are various steps you could take to enhance your retirement savings. Let's explore the following tips to help you build your savings irrespective of your retirement vision or your current stage. 

Add to your 401(k) account

If you are eligible for a traditional 401(k) benefit offered by your employer, you can gain a huge advantage by contributing your pre-tax money. For example, if you intend to add $1000 every payday, your take-home salary will be $888 since this money will be taken out of your paycheck before federal income assesses your taxes. 

This means that you can invest more of your income without it affecting your monthly budget. However, it is essential to note that if your employer plan also has a Roth 401(k) feature that uses income after taxes instead of pre-tax funds, it is best to consider what your income tax bracket would be during retirement to ensure you can choose the right choice. 

Consider IRA or Roth IRA

If your employer doesn't offer a 401(k), you can consider an individual retirement account (IRA) through a brokerage firm or a bank. Offering similar benefits like 401(k) plans like tax-free growth and tax-deductible contributions, they also have other investment options. For example, you can choose to increase your portfolio with mutual funds, bonds, stocks, and other assets to customize your retirement strategy. However, when concerned about a major tax hit when taking money from your plan during retirement, you can opt for a Roth IRA. A Roth IRA can let you take tax-free withdrawals during retirement. 

Consider asset allocation and risk tolerance

Irrespective of the funds that you invest in via your retirement, it is crucial you ensure it is a reflection of your risk tolerance. Risk tolerance should be the basis upon which you build your asset allocation and secure your retirement in Moorestown. Consider using asset allocation calculators to know what your portfolio might look like on various risk levels. 

Consider opening a health savings account ()HSA

Healthcare expenses are one of the expenses that make up a huge part of retirement income. Fidelity Newsroom, in 2022, conducted a study that estimated the expenses a 65-year-old couple would spend on healthcare expenses to be an average of $315,000. Therefore, you have to prepare for this. Opening a health savings account can help you prepare for this future and reduce healthcare costs. Consider it a 401(k) for healthcare expenses. The contributions are usually tax-deductible, and you can make tax-free withdrawals as long as you spend them on qualified healthcare expenses. 

Consider automatic savings

Make contributions to your retirement savings automatically every month. This allows you to grow your nest egg without thinking about it. You can consider using investment plans that allow you to automatically invest assets in particular funds. 

Endnote

Knowing the best retirement strategies for you and planning for it can be very beneficial when you step into your golden years. It is important you save as much as you can with tax-advantage retirement plans while working.  Know how much you can keep and search for ways to increase your contributions. Saving too little or beginning too late are common regrets among retirees. Start now and look forward to your retirement.