6 Ways to Find More Dollars for Retirement Saving

Setting money aside for retirement is critical for most workers, to enable them to live comfortably later in life. You should consider making retirement saving a priority if you are earning enough money to cover your expenses and you also have an emergency fund.

We understand it can be tough to reduce current spending in order to build a nest egg for later. Here are six strategies that may help you find more dollars to set aside for retirement once you have determined that you can afford to do so.

1. Track your spending

There is probably a big chunk of your pay that seems to disappear. You can figure out where it goes by using a budgeting app to track what you spend in cash and with credit and debit cards. Alternatively, you could record your spending in a notebook and add it up in a spreadsheet.

Tracking your spending may make you more mindful and less impulsive. This is similar to how tracking your daily steps or calorie intake may make you more thoughtful about exercise and your diet. Reviewing what you spend over the course of a month or year may help you identify areas where you are willing and able to cut back.

2. Use cash to better budget

When you whip out a debit or credit card to pay $50 for shoes or a restaurant bill, it may not feel like you are giving something up. But pulling out two $20 bills and a $10 bill from your wallet is concrete and may feel painful. If you limit yourself to using cash for most spending, you might find you say no to more spur-of-the-moment purchases.

You could also decide on a budget for a category of spending—such as workday lunches each week or new clothes each season—and put only that amount of cash in an envelope to spend from.

3. Put saving first

Saving shouldn’t be viewed as what you do with any dollars that are left in your bank account at the end of the month or the year. Instead, treat saving like one of the fixed expenses that you must fit discretionary spending around. Financial professionals often talk about this as “paying yourself first.”

If your company sponsors a 401(k) retirement savings plan, you can have money subtracted from each paycheck to contribute to the plan. With an Individual Retirement Account (IRA), you might schedule recurring contributions to be drawn from a bank account each week or month.

4. Bump up contributions when you get a raise

When your paycheck gets bigger, consider boosting your retirement-account contributions right away. That way your discretionary spending doesn’t have a chance to creep up and consume the extra cash. You could have more dollars set aside in your 401(k) or increase your scheduled contribution to an IRA, subject to contribution limits.

5. Invest reimbursements and one-time payments

You may sometimes lay out money for expenses and then wait weeks or longer for reimbursements that feel like unexpected gains when they finally arrive. That can be the case for child-care costs reimbursed through a flexible spending account, business travel covered by your employer, or medical bills reimbursed by insurance or a health savings account. Consider using some of those dollars to boost your retirement accounts.

Similarly, consider investing for your retirement at least part of a bonus you receive at work or cash-back rewards from a credit card. Also see A Tax Refund Could Jumpstart Your Retirement Savings.

6. Match amounts you are spending on fun

It may be easier to get yourself to save money for later in life if the process doesn’t feel like you’re depriving yourself today. One way to do that is to identify amounts you’re spending on some things or experiences you enjoy and, if your budget allows it, resolve to direct an equal amount into saving. If you just decided to spend $500 on a spur-of-the-minute getaway, you might commit to boost your retirement saving this year by the same amount, subject to contribution limits.

You could use the same thinking with a recurring indulgence, such as a $5 coffee break each workday or the gym membership you consider a must-have. Either of those could add up to $100 or more a month. You might review your budget and sign up to have the same amount automatically transferred to an IRA from your bank account every month.



At Honest Dollar by Goldman SachsTM, individuals can easily open a Traditional, Roth or SEP IRA and get access to diversified investment portfolios constructed by the Goldman Sachs’ Investment Strategy Group.

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