Woman and man with papers and a laptop discussing their retirement.

How to save for retirement

It's never too late to put aside more savings for retirement.

If you're like many Americans, you haven't saved as much as you'd like for retirement. But you can take steps now to boost your retirement savings. These tips may help you get back on solid footing with your savings plan.

Start now

The later you wait, the greater the portion of your income you may need to dedicate to reach retirement goals. It can be ideal to make it a goal to save a portion of your income from the moment you begin making money. If you haven’t been saving, see if you can set aside a portion of your income now. If you can’t do that now, start taking steps to cut your expenses or increase your income so you can save as soon as possible.

Automate your savings

Have money taken out of your paycheck before you receive it. You'll learn to live on the smaller net amount as your savings continue to grow.

Put extra money to work

Raises, gifts, bonuses, tax refunds and any other unexpected income can be options to help build your savings for retirement.

Spend less

It sounds simple, but it's a challenge for most people. Create a budget that prioritizes retirement and emergency fund savings. Pay off all high-interest installment debts such as credit cards. Then look at discretionary expenses you could eliminate or reduce, such as expensive coffee drinks, frequent dining out or a pricey TV plan. As a substitute for those, you might try packing a lunch and bringing a coffee from home.

Increase your savings

If you have a few years before retirement, strive to save 10% of your income each year, then increase it annually by 1-2%, or even more if you receive a pay increase. If you can't contribute 10%, don't worry. Save as much as you can; every little bit helps.

Put debt payment dollars to work

If you have allocated a certain amount toward debt repayment and finish paying off credit cards or loans, use those same funds to increase your retirement savings once your debt is eliminated.

401k - Don't overlook matching funds

A 401k plan lets you set aside part of your salary — before taxes are taken out — to save for your retirement. If you’re able, try to steadily increase the amount you contribute over time. Be sure to contribute enough to your retirement plan to earn matching funds from your employer, if they're available. Not taking advantage of this opportunity is like leaving money on the table. And if you’re age 50 or older, you can make catch-up contributions.

Roth and Traditional IRAs

Both Roth IRAs and Traditional IRAs let your earnings grow tax-deferred until you start making withdrawals. You’ll need to determine which is best for you — or maybe a combination of both. For some people, contributing to an IRA along with a pre-tax 401k is a possibility too. And as you near retirement, you can make catch-up contributions to your retirement savings to jump-start a stalled plan.

Review your investments

Are you invested in mutual funds? Many people with long-term investment goals choose these type of investments. If your mix of investments is too conservative or lacks enough diversification, your savings may be stalled. Contact a financial professional to discuss reallocating funds so your retirement savings may continue to grow.

Work a few years longer

If your health and circumstances allow, consider working a year or so beyond traditional retirement age, even if it's a part-time job. The income may allow you to meet expenses while keeping your savings intact and growing. Another benefit: You may be able to stay on your employer's heath care plan.


If your current expenses and lifestyle are too great for you to save regularly, think about minor adjustments you can make to your lifestyle to help save money. Pour the savings directly into your retirement account.

Professional assistance

If you need additional guidance reworking your retirement savings plan, consult a financial or tax professional. And review these pointers from State Farm® if you're trying to decide when it's time to retire.

Neither State Farm nor its agents provide tax or legal advice.

Securities distributed by State Farm VP Management Corp.

Diversification does not assure a profit or protect against loss. Securities, insurance and annuity products are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.


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