Make a lump sum investment
The longer you invest for, the more you benefit from compound interest. Adding a large sum of money into your retirement savings now is one of the best ways to benefit from this long-term growth. One way to boost your retirement savings every year is to take a portion of your annual bonus and use this to increase the amount of money you have saved for retirement.
Increase your monthly contributions
By increasing your monthly contributions you are already taking a step towards saving more for retirement. By investing even a little more every month, you can make a significant impact on your total retirement savings in the future due to the power of compound growth.
Increase rate at which contributions increase
This is another way to increase your retirement savings annually, although it may not have an immediate impact. For example, your salary is expected to increase with inflation every year, so that your purchasing power stays relatively constant. You can set up your contributions so that they also increase with inflation every year. In this way, your purchasing power is not negatively affected, but you end up saving more for retirement every year automatically.
Take on more risk
The more investment risk you take, the higher your expected return will be in the long-term. And while you may experience some fluctuations in the short-term, you will be able to weather the storm if you still have enough time left before retirement. How much investment risk you are willing or able to take is a decision that you will need to make with your financial adviser. The adviser will help to determine your risk profile, as well as the size and duration of the fluctuations in value that you are willing to accept with your retirement savings.
No one wants to postpone retirement. But as lifespans continue to increase, many people are still quite capable of working by the time they retire. As a result, postponing your retirement offers some great financial benefits. Firstly, you have a longer period of time over which to invest. This allows you to contribute more to your retirement savings, as well as benefit more from the compound growth you may have already experienced. Secondly, you will rely on your retirement savings for a shorter period of time. By postponing your retirement you delay the need to draw from your retirement savings, meaning you will spend fewer years in retirement.