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3 Ways to Increase Retirement Savings Without Even Realizing It

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It’s not easy to reduce your income today with the goal of saving more for your future. But that’s essentially what you’re doing when you set money aside for retirement. 

Fortunately, there are ways to make increasing your retirement savings less painful. In this article, you’ll learn three strategies for saving more without even noticing an impact in your budget. 

#1 — Gradually Increase Your Contributions

Most financial experts advise saving at least 10% of your total income. For those getting a later start, the suggested savings rate is often 15% to 20% of total income. 

Numbers like these can seem pretty intimidating, but the good news is that you don’t have to start saving 10% or more overnight. 

Consider starting small… very small. 

If you increase your 401(k) contribution by 1%, chances are you’ll barely notice. And if you increase it by another 1% every six months, you’ll hit your 10% target in just five years. 

If you’re a little more aggressive and increase your savings by 1% every three months instead of every six, you’ll be saving 12% of your income after only three years. 

Many 401(k) plans now have an automatic escalation feature that allows you to put these incremental increases on autopilot. If your plan is one that does, log in today and see what your options are, with the idea of setting aside such a small amount that you’ll barely notice. 

If not, use your calendar of choice to set a reminder — starting today and repeating at least every six months — to increase your contribution percentage by 1%.

#2 — Increase Your Contributions Every Time You Get a Raise

Another trick for increasing your savings rate is to simultaneously increase your contribution percentage every time you get a raise. With this method, you’ll still see more income while also boosting your savings rate. 

A good place to start is by setting aside ⅓ of every raise. For example, if your income goes up by 3%, increase your contribution percentage by 1%. Likewise, with a 6% raise you would increase your contribution rate by 2%. 

If you’re more likely to get a bonus than a raise, call your HR department and ask to save ⅓ of your bonus to your 401(k), and then resume normal contributions thereafter. 

#3 — Decrease Your Fees

If you’re saving 6% of your income but paying 1% in fees, your actual savings rate is closer to 5%. On the other hand, if you’re saving 6% of your income and only paying 0.2% in fees, your actual savings rate is closer to 5.8%. 

That might not seem like much of a difference over a year, but over a lifetime those fees can add up to thousands of dollars. This is especially true for people working in small businesses, where 401(k) fees tend to be the highest.

Keep in mind that it’s not just your 401(k) where fees hurt. If you’re also contributing to a Roth IRA, make sure you understand the fees you’re paying there as well. 


Think small, take advantage of raises, and decrease your fees. It might not seem like much today, but that’s exactly the point. Over the long-term, these small changes that you barely notice today will make a world of difference. 


About the Author

R.J. Weiss is the founder and editor of The Ways To Wealth, a Certified Financial Planner™, husband and father of three. He’s spent the last 10+ years writing about personal finance and has been featured in Forbes, Bloomberg, MSN Money, and other publications.
Find him on Pinterest and Facebook.

Published on August 1, 2019