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5 Ways To Improve Your Retirement Account Today

BlackBird Finance: Retirement Nest Eggs

5 Ways To Improve Your Retirement Account Today


If you are looking to create a comfortable retirement, then you will want to take the right steps as early as possible. Even making some slight adjustments can greatly impact how much you can have when you finally decide to get away from your 9 to 5 job. With that in mind, here are five steps that you can take to improve your retirement account today.

1. Diversify that retirement account

During your investment career, there will be times when the market will become extremely volatile. During these times, you can see some dramatic changes in your investments. One of the best ways to handle that volatility is to diversify your investments. Here are some tips to make sure your retirement accounts are properly diversified:

  • Have a mix of uncorrelated assets such as stocks, bonds, and commodities.
  • Own ETFs and Mutual Funds that include a basket of different securities.
  • Own stocks in different sectors such as tech, utilities, energy, real estate etc..
  • Own both value and growth stocks.

2. Automate contributions

You want to make sure that you are setting aside enough money for your retirement if you don’t already have an employer’s plan that does it for you. One of the best ways to fund your retirement account is to set up automatic contributions with an IRA. All brokerages these days offer a way for your bank to send a set amount of money to your retirement account. By automating your contributions, you will be well on your way to creating a happy retirement. Automatic contributions also help reduce some market risk by taking advantage of a process called, dollar-cost averaging. Read more about Dollar-Cost Averaging here.

3. Take advantage of catch-up contributions if you are over 50

If you made the mistake of cashing out your retirement at some point you have a chance to redeem yourself. It’s known as the catch-up provision. If you are over the age of 50, then you can contribute more than the standard limits on retirement accounts. Contribution limits went up in 2021 an additional $500 for IRA’s but remained unchanged for employer plans. As of 2021, the catch-up provisions allow you to add an additional $1,000 for a total of $7,000, in contributions, to your IRA account. Employer-sponsored plans such as 401k’s and 403b’s also have a catch-up provision. $6,500 can be added on top of the $19,500 limit for employer plans.

4. Take advantage of your employer’s matching contribution

Did you know that your employer may contribute to your retirement? There is a good chance that your employer offers matching contributions to your retirement plan up to a certain percentage. This is essentially free money your employer will put into your account and they benefit by getting tax credits and write-offs. The exact matching amount may vary depending on how good your benefits package is. Most employers fall into the range of 2% – 6%. You will want to check for the maximum they will contribute and at least try to meet that match. For example, they match 3%, then you should at least put in 3%.

5. Set your retirement goal

One of the best ways to reach a comfortable number for your retirement is to have a goal. The earlier that you set your retirement goal the better. When you write down your goals it has been shown you will more likely succeed with those goals as well. So, what amount of money should you aim for to fund your retirement? One good way to calculate your retirement goal is to estimate how much you want to live on each year. After that, multiply that number by 25. For instance, if you want to live on $50,000 per year, then multiple $50,000 times 25. This gives you a retirement goal number of $1,250,000.

Here is an easy to use tool to figure out your retirement goal, if you are alright with giving up your email.  R:IQ Assessment

Keeping yourself on track to retire on your timeline

Now is the time to start planning and funding your retirement. Be sure to set a goal, contribute as much as you can and set up automatic payments. With the right planning, you will be well on track to a fully-funded lifestyle after your working days. These are quick things you can do today on your own. Getting more in-depth retirement planning from a professional will only increase your odds of success. Reach out to a financial coach if you want more help.




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