Catching Up on Retirement Savings: Strategies for Boosting Your Nest Egg

Life doesn’t always go as planned.

Whether due to unforeseen expenses, career changes, or simply starting late, many find themselves approaching retirement with less savings than they’d hoped.

The good news? It’s never too late to build your nest egg.

With strategic planning and smart financial moves, you can help boost your retirement savings and work toward a more comfortable future.

At Pinnacle Advisors, we bring together your financial planner, tax professional, and estate advisor all at the same table, all on your side.

Serving Ohio and Florida, we help individuals craft personalized strategies to catch up on retirement savings and achieve their financial goals. Here are some effective steps to consider.

1. Maximize Contributions to Retirement Accounts

If you’re over 50, you have a powerful tool at your disposal: catch-up contributions.

• 401(k) Plans: For 2024, you can contribute up to $22,500, with an additional $7,500 catch-up contribution, totaling $30,000 annually.
  

• IRA Accounts: You can contribute up to $7,500 annually, thanks to the $1,000 catch-up contribution.

By maximizing these contributions, you can significantly accelerate your savings in the years leading up to retirement.

2. Consider a Health Savings Account (HSA)

An HSA is not just for covering medical expenses, it’s also a triple-tax-advantaged way to save for retirement.

Contributions are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses.

If you’re 55 or older, you can contribute an extra $1,000 per year, boosting your annual limit to $4,850 for individuals or $8,750 for families in 2024.

Once you turn 65, you can use HSA funds for non-medical expenses without penalty, though they’ll be taxed like traditional IRA withdrawals.

3. Reevaluate Your Investment Strategy

As retirement approaches, balancing risk and growth is crucial.

• Diversify Your Portfolio: Spread your investments across various asset classes to minimize risk.
  

• Consider Dividend-Paying Stocks: These can provide a steady income stream while still offering growth potential.
  

• Stay the Course: Avoid panic selling during market downturns. Staying invested ensures you benefit from market recoveries.

Working with a financial advisor can help tailor your portfolio to match your risk tolerance and retirement timeline.

4. Delay Social Security Benefits

If possible, consider delaying Social Security benefits until age 70. For each year you delay past your full retirement age, your benefits increase by approximately 8%.

This strategy not only boosts your monthly income but can also provide more financial security in your later years.

5. Generate Additional Income

If your current savings aren’t enough, finding ways to increase your income can make a significant difference.

• Part-Time Work: Even a few hours a week can add up over time.
  

• Monetize Hobbies: Turn a passion, like crafting, writing, or tutoring, into a side income.
  

• Rental Income: If you have extra space, consider renting it out through platforms like Airbnb.

Every extra dollar earned is a dollar you can invest in your future.

6. Reduce Debt and Control Spending

Paying down high-interest debt can free up money for retirement savings.

Start by tackling credit card balances and any other high-interest loans.

Additionally, creating a budget that prioritizes saving will ensure you’re making the most of every dollar.

7. Take Advantage of Employer Benefits

Ensure you’re making the most of any employer-sponsored benefits, such as:

• 401(k) Matching: Contribute enough to get the full match, it’s essentially free money.
  

• Deferred Compensation Plans: If available, these can help you defer income taxes until retirement.

Understanding your benefits can enhance your overall retirement strategy.

8. Reassess Your Retirement Goals

It’s important to have a clear, realistic picture of what you want your retirement to look like. Consider:

• Adjusting Your Retirement Age: Working a few extra years can significantly increase your savings.
  

• Relocating to a Lower-Cost Area: This can stretch your retirement dollars further.
  

• Exploring Affordable Healthcare Options: Health insurance is a major expense, compare options to find the most cost-effective plan.

9. Meet Regularly with Your Financial Advisor

Navigating the path to retirement can be complex, but you don’t have to do it alone.

At Pinnacle Advisors, we bring together experts in financial planning, tax strategy, and estate planning to provide comprehensive support, all at the same table, all on your side.

Regular check-ins with your advisor can ensure you’re on track and making informed decisions.

Take Control of Your Retirement Today

Catching up on retirement savings may seem daunting, but with proactive planning and professional guidance, you can work to build the nest egg you need.

Contact Pinnacle Advisors today to create a customized strategy that aligns with your goals and works toward realizing your financial future.

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance is no guarantee of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Pinnacle Advisors [“Pinnacle”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Pinnacle. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. No amount of prior experience or success should be construed that a certain level of results or satisfaction will be achieved if Pinnacle is engaged, or continues to be engaged, to provide investment advisory services. Pinnacle is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Pinnacle’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.pinnacleadvisors.com. Please Note: Pinnacle does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Pinnacle’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a Pinnacle client, please contact Pinnacle, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.  Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.