How to Make Your Retirement Savings Grow As Fast as Possible

by | May 23, 2012 | Personal Finance

Blue Pig BankHave you started saving for your retirement?

When you are young it might seem like a long way away, but in order to save enough money to stop working the earlier you start, the better.

But what if you want to make your retirement savings grow faster and perhaps retire a few years earlier?

Here are some tips that will help you accelerate towards your goal:

Have a Concrete Goal

Amassing enough wealth to comfortably retire is a long and methodical process and it takes a lot of commitment and delayed gratification.

It is a lot easier to stay dedicated if you have a specific goal and you can see yourself getting closer to it.

Before you start saving, calculate the lifestyle that you hope to have when you retire and what it will cost.

Don’t forget to factor in future inflation. Now keep this goal in your mind to motivate you to work towards it.

Pay Yourself First

One of the most foolproof ways to increase your savings faster is to pay yourself right away so that you won’t make excuses or forget to save.

Set up an automated deposit which will transfer a portion of every paycheck into your retirement fund as soon as it enters your bank account.

This way, you will get used to not spending that money and you won’t even notice it is missing.

The regular payments will add up over the years and leave you with a sizable nest egg for retirement.

Maximize Your Tax-Advantaged Retirement Accounts

Take advantage of your 401(K) because this is one of the best options available for saving for retirement.

Your contributions will be tax free and in some cases your employer will match your contributions, which is an easy way of getting free money.

Put Raises into Savings

After you have been working for a while, you might end up getting a raise into a higher pay bracket.

What tends to happen is that most people find ways to spend this extra money on a bigger TV, nicer clothes and other things that make their lifestyle slightly more luxurious.

However, think how much faster your savings could grow and how much more comfortable your retirement would be if you put the extra money from your raise into your savings and continued to live on your old wage?

These are just a few ways that you can make your retirement savings grow faster and build a nest egg which will support you in your golden years.