For many Americans, saving for retirement is a top financial goal. Whether retirement is around the corner or decades away, there are ways to catch up on retirement contributions to improve your future financial options. If saving for retirement is your goal, learn how to increase your savings with these tips
If you’re nearing retirement and are concerned you haven’t saved as much as you would like, there may be options to help you increase the amount in your retirement savings accounts . According to federal law, those under the age of 50 can contribute up to $18,000* annually to a 401(k) and $5,500* to an IRA. However, those over the age of 50 can take advantage of catch-up contributions to boost their retirement savings. The catch-up contribution limits during 2015* are as follows:
Thanks to the catch-up contributions you can make in addition to your regular contributions, you could save up to $24,000* in your 401(k) and $6,500* in your Traditional or Roth IRA every year. If you're able to make the maximum catch-up contributions to your retirement savings accounts starting at age 50, you could accumulate over $700,000 by the age of 65 (with an annual return rate of six percent). The amount you are able to save will be determined by your current financial situation and expenses, but no matter how old you are, you can still grow your savings if you make a commitment to it now.
In addition to using catch-up contributions to boost your 401(k) and IRA, there are a number of other strategies that can help you save more, reach your savings goals and make better use of your funds after distributions have begun.
It's never too late to start saving for retirement. If you're wondering how to increase your retirement savings, Citizens Bank offers a number of options, including IRAs, CDs and personal savings accounts to help your money grow before and during your retirement. To learn more about increasing your savings or making catch-up contributions, speak with a Citizens Bank customer service representative today.
*Contribution amounts may change based on IRS rules. Amounts shown are accurate as of October 1, 2015.