Saving money for retirement feels daunting, even insurmountable. You’re paying off high-interest debts, building assets, and saving for future expenses – how are you supposed to save for retirement?
The answer is simple: Planning. Whether you’re a young professional or nearing retirement age, there are numerous things you can do to boost your retirement income. Let’s look at five creative ways that can help secure your financial future.
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Start As Soon As Possible
There is no right age to start saving for retirement. The earlier you start, the more time your money will have to grow. This is exactly how compound interest works.
Look at it this way: If you deposit $100 in a retirement account with a 10% interest rate. You will earn $100, bringing the total to $1,100. The next year, you earn interest on the new, higher balance, which in this case, is $1,100.
This “interest on interest” scenario creates a snowball effect, so your money grows much faster. Starting early with small contributions can result in a much larger retirement fund than starting late with higher contributions.
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Delay Social Security Benefits
Social security benefits are a key source of retirement income. Fortunately, there is a way to get a permanently higher monthly payment. Consider delaying collection past the earliest eligible age (62) up to age 70.
For each month you wait past your retirement age, the benefits increase by a certain percentage, going up to 8% a year. This increased income will help you navigate high inflation and rising costs of living.
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Diversify Your Investment Portfolio
Diversifying your investment portfolio is another excellent way to boost your retirement income. For instance, you can shift a portion of your portfolio towards investments that provide regular income. This includes dividend-paying stocks, bonds, and Certificates of Deposit (CDs).
On the other hand, you can invest in assets that promise long-term growth, such as real estate. Consulting with a financial advisor is incredibly important. A financial advisor in Portland, or your area, would assess your financial goals and suggest tailored strategies to maximize your savings.
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Make Maximum Contribution to Your 401(k)
If your employer is offering a traditional 401(k) and you’re eligible, contribute to it as much as possible. It is a strategic financial move and can help you benefit from tax deferral.
Look at it this way: You contribute pre-tax dollars to a traditional 401(k). When you withdraw, the contributed amount is deducted from your taxable income for that year. Most people find themselves in a lower tax bracket after retiring, so they pay less in taxes.
In 2025, employees can contribute a maximum of $23,500 to their 401(k)s. However, those above 50 can contribute an additional $7,500. This is called a catch-up contribution.
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Meet Your Employer’s Match
Making maximum contributions to your 401(k) also allows you to meet your employer’s match. Often known as a way to get free money, it is a scenario in which a company contributes to an employee’s retirement account based on the employee’s own contributions.
Employers use a specific formula. Let’s say you earn $50,000 and contribute $3,000 (6%) to your 401(k). The employer might contribute $1,500, which means the match is 50%. Some employers even match 100% of your contributions up to a certain amount.
Conclusion
Boosting your retirement income is easier when you start early, make informed choices, and take advantage of every opportunity available to you. Whether you delay Social Security, diversify your investments, or maximize your 401(k) contributions, each step strengthens your financial future. With thoughtful planning and consistent action, you can build a retirement income that supports the lifestyle you want and gives you confidence in the years ahead.