We are more likely to spend when we have money in our pockets. That’s why automating the process of saving for retirement is a great way to achieve your financial goals. On this episode, I’m going to share five ways you can automate your retirement savings this year and stay on track for years to come.

You will want to hear this episode if you are interested in...

• Are you automatically saving? [1:29]
• Automated savings through an HSA [3:27]
• Using a Roth IRA for automated savings [5:58]
• Opening a high-yield savings account [7:39]
• Automating debt payments [10:58]

Easy retirement savings automation

The first and easiest way to automate saving for retirement is to set up and contribute to a work-sponsored retirement plan. If your company offers retirement options through a 401k, 403b, or 457 plan, chances are you’re already taking advantage of this. But perhaps other financial priorities have kept you from signing up for one of these automated retirement savings plans? If that’s the case, make sure you sign up for a retirement plan this year so you can receive the maximum match for your company.

If you want to max out your 401k this year, my recommendation is to double-check the amounts you’re set to contribute on an annual basis. The maximum contribution for a 401k in 2023 has increased to $22,500 if you're under 50. For those over 50, you can make an additional $7,500 catch-up contribution, bringing the maximum to $30,000. It’s also a good time to review your investments and make sure you have an advantageous asset allocation.

Going beyond the basics

Do you have extra money just sitting in your regular bank account? Whether it’s for emergencies or fun, it’s time to check the interest you’re accruing. Without even looking, I can tell you that it's probably almost zero. Banks make money by paying you little to no interest. So take matters into your own hands! One option is opening a high-yield savings account. You could also open a brokerage account by combining an investment and savings account. With interest rates rising, any of these options will give you a more competitive yield than a traditional bank account.

Another great option for automatic retirement savings is through a Roth IRA. If opening a Roth IRA makes sense for your financial situation, you need to determine how much you want to contribute to your Roth account on a monthly or semi-monthly basis once it’s set up. The annual contribution limit for 2023 has gone up to $6,500 for those under 50, and $7,500 for anyone older. If you want to make the maximum contribution, simply divide the amount that applies to you by 12 or 24 and set up automatic contributions in that amount. Listen to this episode for additional tips on automating your retirement savings and investments!

Resources Mentioned

• Bankrate.com

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