Saving more for your retirement is as easy as 1, 2, 3

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When it comes to increasing your retirement savings it can be easy to forget to focus on the long view in the face of daily, weekly and monthly spending priorities.

But making a small increase in the amount you save in your employer retirement plan today can really pay off in the future – plus when you increase your retirement contributions you also decrease your overall taxable income and help reduce the amount you pay in taxes each paycheck.

Let’s see what a simple 1%, 2% or 3% increase from your salary can mean for someone earning $75,000 a year who is currently contributing 4% of their salary in their workplace retirement plan:

How much more will you contribute to your retirement plan over time

As you can see, when you increase your salary contribution rate by 1, 2 or 3% the additional amount you are saving for retirement is substantial.

 

Increasing your contribution is a TIAA smart money move for 2024

Increasing your retirement plan contribution rate is just one of our “Four Smart Money Moves You Can Make in 2024” Four Smart Money Moves for 2024 Retirement Planning | TIAA – learn more about the other three moves and start your year off right!

Log in to your account to manage your contributions.

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A little more now can pay off in the future

And, by looking at the historical performance of approximate 10% annual growth for the S&P 500 for the last 30 years* as an example of how these accounts may grow over time, we can see the full picture of how adding more money to your account, even in small increments can really add up.

How much your account can potentially grow when you contribute more over time

The growth potential of your additional contributions can have a profound effect on your retirement account balance.

No matter how much extra you invest, whether 1, 2 or 3%, you’ll earn 503% more than you contributed. In this example, after 30 years of contributing 1% more than the original 4%, you will have contributed $22,500 more, and in return earned an additional $135,708.

The power of saving and budgeting

Saving more can go a long way towards achieving your long term retirement goals, but saving more and spending less by proactively managing your budget can help you get where you want to go even faster.

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Reach out to us with questions

Be sure to reach out and schedule a session with our team of financial consultants if you have questions about saving more in your retirement plan. Together we can find the right approach for your retirement plan including a deep dive into how saving a little more now can help set you up in the future to reach your retirement goals.

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*For illustrative purposes only. Past performance is not a guarantee of future performance.

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