8 Ways To Maximize Retirement Savings

You may think that contributing to retirement accounts often and investing well is all that you need to do to enjoy a successful retirement, and you might be right, but you also may be leaving money on the table that could support you through your golden years. 

Setting yourself up for retirement isn’t just about saving what you can, but maximizing retirement savings as best you can. No matter how much you’re able to stash away or how you do it, the following strategies can help you maximize your retirement savings even when you’re already maximizing your contributions.

1. Start saving early
2. Create a detailed retirement budget
3. Maximize retirement contributions to employer-sponsored retirement accounts
4. Invest wisely
5. Optimize for tax efficiency
6. Explore health savings accounts (HSAs)
7. Monitor and adjust your plan regularly
8. Work with an experienced retirement planner

In this article, the financial advisors at Avidian Wealth Solutions will discuss some of the strategies commonly used in retirement planning for high-net-worth individuals. 

8 ways to maximize your retirement savings

1. Start saving early

Time is a powerful ally when it comes to building wealth. The earlier you start saving for retirement, the more time your money has to grow through compound interest — even small contributions made consistently over several decades can result in substantial savings. 

Even if you’re late to start retirement planning, it is never too late to begin seriously considering saving for retirement. 

2. Create a detailed retirement budget

Do your best to anticipate your future expenses and the type of lifestyle you picture yourself enjoying during retirement. Your expenses will determine much of your retirement budget, but you should also consider factors like healthcare costs, how long you’re planning to work, and any income that you will continue to receive throughout retirement. 

Additionally, to create an accurate budget you will need to clearly define your broader retirement goals. Retirement income planning can only be done to its fullest extent when you set realistic retirement goals: if you’re planning to travel, purchase more property, or make considerable charitable contributions, those things need to be planned for. 

Continue reading about investing in real estate for retirement.

3. Maximize retirement contributions to employer-sponsored retirement accounts

If your employer has any sort of sponsored retirement plans (i.e. 401(k) plans or pensions), you are losing money by not taking advantage of them. Employer-sponsored retirement accounts often match considerable amounts of your contributions and can turn a smart saving device into an indispensable retirement planning tool. 

While there is often a maximum amount that can be donated to employer-sponsored retirement accounts, you should review these accounts over time to make sure that you are maximizing retirement contributions where possible, and getting the most that you can out of these powerful tools. 

Additionally, although contributions to Roth IRAs and Roth 401(k)s are made with after-tax dollars, if you use the funds correctly (i.e. for qualified distributions), you will never have to pay taxes on them again, making Roth IRAs and Roth 401(k)s an incredibly powerful retirement planning tool. Distributions from Roth accounts are considered “qualified” when the account is at least 5 years old, and:

• Made after reaching the age of 59 ½ 
• For reason of disability
• For a first-time home purchase

4. Invest wisely

Once you’ve set your goals and have a well-constructed plan in place, you can turn your mind to investing. Ideally, your investment decisions will be based on your risk tolerance, time horizon, and financial goals.

There are many alternative ways to save for retirement, and a majority of them offer benefits beyond traditional assets tied to market fluctuations, but no matter how you’re investing, you should keep a diversified portfolio, spreading your investments across multiple asset classes and industries. A diversified portfolio can withstand more fluctuations from the market, and therefore better protect the wealth that you’ve worked so hard to earn. 

Continue reading: Where is the safest place to put your retirement money?

5. Optimize for tax efficiency

Understanding the tax implications of your retirement accounts and effective retirement tax planning is essential if you want to maximize retirement savings. Different retirement accounts provide different tax benefits: traditional IRAs offer tax-deferred growth, while Roth accounts are funded with after-tax contributions and therefore grow tax-free. Roth Conversions may be used to convert IRA funds to a Roth IRA, and if done correctly and in the proper amounts, can reduce taxation in retirement.

Make sure that you have a tax-efficient withdrawal strategy in place to minimize the tax burden on the eventual withdrawals of your retirement income, keeping in mind that your tax bracket when you retire may be different from the tax bracket you’re in now.

6. Explore health savings accounts (HSAs)

HSAs are powerful retirement planning tools because they offer several tax benefits: 

• Contributions are tax-deductible
• Earnings grow tax-free
• Withdrawals for qualified medical expenses are tax-free

If you’re eligible for an HSA, making contributions and letting the funds grow for future healthcare expenses can be a great way to maximize retirement savings and help make sure that you’re prepared for different scenarios you may face as you age. 

7. Monitor and adjust your plan regularly

Whether high investment fees are eating into your retirement savings, your material circumstances have significantly changed, or your goals for how you want to spend your retirement have changed, monitoring and adjusting your retirement plan regularly is essential to a well-planned and well-spent retirement.

8. Work with an experienced retirement planner

The good news is that there are countless ways to set yourself up for a prosperous retirement, depending on your circumstances and goals. The journey to making the most out of your retirement is a long process, and your approach to it is likely to change throughout your life. 

Whether you’re interested in opening 529 accounts for grandchildren, taxable investment accounts, or investing in real estate, talking with an experienced and trusted advisor can help you make sure you’re making decisions that keep you on track for a smooth retirement.

Looking to maximize retirement savings? Avidian Wealth Solutions can help.

Those looking to maximize retirement savings will need a combination of discipline, strategic planning, and adaptability. By working with an experienced financial advisor and incorporating these 8 ways to maximize your retirement savings, you can help protect your savings and create a roadmap for your ideal retirement.

The financial advisors at Avidian Wealth Solutions can help you assess unique investment opportunities, create a sound retirement plan, and proactively monitor and adjust that plan to best position you for success. 

We offer high-net-worth retirement planning in Houston, Austin, Sugar Land, The Woodlands, and throughout Texas.Take the first step in working to maximize your retirement savings by scheduling a conversation with one of our advisors today!

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