Although saving more takes some effort, it may be easier than you think-- there may even be "free" money available that can help. Here are some tips:
1. Take advantage of an employer match. If they'll match 3%, you've just covered 6% of your retirement savings goal when you add in your contribution, too. While the specifics vary, many companies will match whatever you contribute to the retirement plan (up to a certain percentage of your income).
2. Increase your savings rate just 1% a year, whether in an IRA, a 401(k) or some other dedicated account. This small change means you'll be at 15% within 10 years without even feeling it.
3. Investigate additonal opportunities at work, such as corporate profit-sharing plans, employee stock purchase plans, which enable you to purchase your employer's stock at a discount, and employee stock ownership plans, which provide company stock at no cost as part of overall compensation.
4. Put money aside in tax-deferred accounts such as a 401(k) or a traditional retirement account. Doing so can cut your tax bill. Contributions to a Roth IRA, by contrast, are not tax deductible but can grow tax free. Earnings may be taxed if withdrawn before you've held the account for five years.
5. Consolidate your financial accounts to take advantage of potentially lower fees. Don't assume a bank is your only choice for a checking account, and consider applying whatever savings you achieve to your retirement fund.
6. Pay yourself first. Schedule automatic transfers from your checking or savings account into your retirement account. This keeps you on track and also ensures that you're investing regardless of market fluctuaitons. *
7. Find a credit card that deposits cash back directly into your retirement account. Careful here--this only works if you diligently pay off the card balance every month.
*This strategy does not assure a profit and does not protect against loss. It involves continuous investment regardless of fluctuating price levels of such securities. Investors should consider their financial ability to continue purchases through periods of low price levels.
Investing involves risk including the possible loss of capital. There is no assurance that any investment strategy will be successful. Withdrawals from tax-deferred accounts may be subject to income taxes, and prior to age59½ a 10% federal penalty tax may also apply.