4 Ways You Can Boost Your Retirement Savings

4 Ways You Can Boost Your Retirement Savings

According to a recent CNBC report, on the whole, Americans are not making sufficient financial provision for retirement. In fact, according to data published by Northwestern Mutual in their 2019 Planning and Progress Study, 15 percent of US citizens have no retirement savings at all.

For those concerned that they need to boost their retirement savings, we explore four simple tactics.

1. Increasing Contributions to Retirement Savings Vehicles

For those who have yet to reach retirement age, there still may be time to significantly boost retirement savings by increasing contributions to the maximum they can afford. This is a popular option for individuals who benefit from company-matched retirement contributions, which can substantially boost retirement savings.

2. Continuing to Work

Many US citizens continue to work after reaching retirement age, in either a full-time or part-time capacity. This enables them to maintain their standard of living, benefitting from a steady income in addition to drawing retirement contributions.

According to Bureau of Labor statistics, over the next decade, seniors are likely to represent the fastest-growing segment of the US labor force. By 2022, experts predict that 32 percent of individuals aged 65 to 74  will continue to work. This is a significant increase over the 20 percent still working in 2002.

As AARP Senior Strategic Policy Adviser Sara Rix explains, although the number of workers aged 75-plus remains relatively small, the trend is following an upward trajectory. Rix points out that the increase would accelerate if midlife career changes were made easier, with people in their late 70s and 80s continuing to enjoy interesting, enjoyable careers.

3. Consolidating Retirement Savings Accounts

For those with more than one retirement savings account, consolidating retirements could be an effective way of reducing both fees and tax liability. Combining accounts also makes it easier to keep track of the amount saved.

4. Investing in an MPP

MPPs, or Malta Retirement Plans, offer considerable incentives to high net worth individuals, particularly in terms of flexibility and tax-saving capabilities. From a federal perspective, an MPP is effectively treated as a foreign grantor trust. As a result, contributions of appreciated assets do not trigger adverse tax consequences.

Additionally, unlike Roth IRAs, MPPs have no financial penalties for drawing distributions before the age of 59 1/2. Indeed, once the investor reaches the age of 50, they can draw an initial lump sum payment free of US and Maltese tax of up to 30 percent of the retirement fund value.

With no earnings or contribution cap and tax-free distributions, it is easy to see why MPPs are rapidly becoming the retirement savings vehicle of choice for high net worth investors.