As you approach retirement, you may realize that you haven't saved enough. Up to one in three adults between 55 and 64 years of age haven't even started a retirement fund, so it's common to look for ways to boost your IRA savings without compromising your emergency fund or cash reserves.
Move savings to your IRA
Maybe you have an emergency fund or savings account that's earning minimal interest. As long as you keep enough money for true emergencies, moving some excess savings into your IRA can help your retirement balance grow faster.
Invest tax returns
The money you receive as a tax refund can do more than pay for a vacation. Consider investing part or all of it into your IRA so it has more time to earn interest and compound.
Withdraw CD interest
If you have a certificate of deposit that hasn't matured, withdrawing the principal can trigger penalties, but accrued interest is often available without fee. Using that interest to add to your IRA is a low-cost way to increase contributions.
Access an annuity
An annuity that isn't already in a retirement account can sometimes be a source of funds for your IRA. Check the insurance benefits and compare fees for the annuity and the IRA to make sure you're not losing more in fees than you gain in retirement savings.
Delay withdrawals
Once you reach the age for penalty-free withdrawals, you can take money without penalties, but delaying withdrawals when possible lets your accounts continue to grow for a longer period.
Reinvest retirement funds
If you must take withdrawals, reinvesting those funds into your IRA or rolling them over can help preserve retirement savings. For examples and distribution considerations, see Sewickley, PA Retirement Distribution Options.
Downsize your home
Selling a larger home and renting or buying a smaller place can free up equity that you can invest for retirement, and the monthly savings may be redirected into your IRA.
Take on a renter
If selling isn't practical, renting out a room or part of your home can generate extra income. After expenses, put the rental proceeds toward your retirement fund.
Get a second job
A second job or freelance work near the end of your career can provide extra income that goes directly into your IRA. Your experience and skills may be especially valuable for part-time consulting or gig work.
Saving for retirement now gives you greater peace of mind, and small changes in spending and saving can add up. For professional guidance tailored to your situation, consider Retirement Planning Services. Or talk to an agent to review options.
Frequently Asked Questions
What is the annual contribution deadline for IRAs?
Contributions for a given tax year are typically allowed up to the tax filing deadline the following year, but check current IRS guidance or with a financial advisor for exact dates.
Can I move money from a non-retirement annuity into an IRA?
Moving funds from a non-retirement annuity into an IRA may be possible but could involve taxes or surrender charges, so review fees and tax consequences before proceeding.
Will withdrawing CD interest affect my savings goals?
Using only accrued CD interest typically preserves the principal while providing extra funds for your IRA, so it can be a low-impact way to boost retirement savings.
How can I decide whether to downsize my home for retirement savings?
Compare the after-tax proceeds, ongoing housing costs, and personal preferences; a financial planner or retirement specialist can help model the long-term impact.