1. Snag your full employer 401(k) match
Many employers that sponsor 401(k) plans also offer matching contributions, provided you put some money into your account out of your own paycheck. These matches are effectively free money, and snagging them in full could help you retire with a much larger nest egg.
Say your full 401(k) match would put an extra $150 in your retirement plan each month. If you snag that match every month over a 30-year period, and your 401(k) generates an average annual 8% return (which we’ll discuss in just a bit), then your employer’s contributions alone will add about $204,000 to your ending balance.
2. Bank your tax refunds
You may not get a tax refund every year, but when you do, sticking that money into your retirement plan could go a long way. Imagine you’re 25 years away from retirement and get a $2,500 refund you weren’t necessarily expecting. If you put that cash into your IRA or 401(k), and your retirement plan generates an average annual 8% return, that contribution alone will add a little over $17,000 to your ending balance.
3. Invest your money in stocks
The 8% average annual return we keep talking about? It’s attainable if you invest your retirement savings heavily in stocks. Play it too safe by loading up on bonds, and you might slash your return in half, leaving you with a lot less money by the time your career comes to a close.