If you want to increase the total amount of savings you’ll have to live on in retirement, there are a few things you can do that don’t require boosting your income.
When you’re saving for retirement, it’s just as much about saving more as it is making the most of what you have. In a retirement account, this means making sure your accounts — and the money in them — are working as hard as possible.
Here are five ways you can help to make your retirement savings grow that won’t cost you much or anything.
1. Make sure your retirement account is invested properly
It can be all too easy to simply set up a retirement account — and then not actually invest it, or to invest it too conservatively. That said, you’ll want to check in on your retirement accounts periodically and see how your portfolio is growing. If it’s not growing much, you may need to make an adjustment.
Financial planner Jovan Johnson of Piece of Wealth Planning suggests changing how your account is invested. “You can switch to low-fee investments, that’s always a great option. Or, consider being more aggressive for a higher return if you’re younger and OK with that additional risk,” he says.
To do this, you’ll want to compare the options available. “Look at the different investments that they offer and compare by looking at the fees and returns,” Johnson says.
Looking for the lowest fees can help you save more, and the highest returns, can help your account grow, but make sure you’re taking on the appropriate level of risk for your age.
2. Make sure you’re getting your full employer match
If your employer offers a 401(k) plan, you’ll want to make sure you’re taking full advantage.
Employer matches are essentially free money offered by employers to any employee who saves for retirement in their 401(k) plan. Oftentimes, companies will contribute the same amount you do, up to a certain percentage of your salary.
If you’re not sure if your company has a match, or if you aren’t sure you’re getting the full match, contact your employer’s HR department for information about your company’s policy.
3. Look for old 401(k)s from previous jobs, and roll them over to an IRA
If you have a 401(k) from a previous job, rolling that account over is a smart move. This process moves funds from an old employer’s 401(k) plan into your IRA account.
“I think it’s always best to roll it over,” Johnson says. “Not only do you get better investment options with the IRA, but typically previous employers do charge an administrative expense as well.” These fees can range from 0.5% of an account’s value to 2% or more of your portfolio.
These fees are worth it while you’re with your employer, especially if there’s a match involved. But once you’ve moved on from your old job, rolling over an old 401(k) can help you better keep track of what you have saved for retirement, and save on fees.
4. Deposit your tax refund to an IRA
If you don’t immediately need your tax refund, putting it into your IRA could help you get one step closer to maxing it out.
No matter how big or small, investing your tax refund can be a big boost to your account. “It’s always great to funnel that into an IRA,” says Johnson. “They paid you back your money as a tax refund, and then you turn around and put it into an IRA and get a tax deduction. It’s a, win-win.” Putting the money into a traditional IRA would allow you to get a deduction for the following year.
Investing windfalls like a tax refund can help you hide the money from yourself, and make it grow over many years.
5. Open a health savings account, and invest contributions for later
If you have a high-deductible health insurance plan, you have an extra account available to save more for retirement. A health savings account, also called an HSA, is a tax-advantaged account you can use to save on top of a 401(k) and IRA for retirement.
These funds can be spent on healthcare costs now or later, and unlike flexible spending accounts, they don’t expire annually. Funds in these accounts can also be invested and kept to use later on in retirement.
If you’re eligible, opening an HSA could allow you to contribute an extra $3,600 for retirement if your health insurance policy only covers you, and up to $7,200 for a family.