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Increasing Retirement Contributions

Written by
Sterling Bank & Trust, FSB
Published on
April 9, 2024
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As you navigate the financial planning landscape, securing a comfortable retirement is a

paramount goal. While retirement might seem distant, the power of compound interest

reinforces the importance of starting early. By increasing your retirement contributions, you not

only position yourself for a prosperous post-work life but also harness the magic of

compounding over time. In this article, we'll delve into practical strategies that allow you to

amplify your retirement savings and leverage the remarkable benefits of compounding.

1. Review Your Current Contributions: Evaluate your current retirement contributions. Assess

whether you can comfortably allocate more funds towards your retirement accounts without

jeopardizing your immediate financial needs.

2. Take Advantage of Employer Matches: If your workplace offers a retirement plan with

employer matches, ensure you contribute enough to capitalize on this free money. These

matches are essentially a risk-free boost to your retirement fund.

3. Incremental Increases: Gradually increase your contribution rate over time. Small increments,

even as little as 1% per year, can make a substantial difference in the long run.

4. Leverage Catch-Up Contributions: If you're over 50, take advantage of catch-up

contributions allowed by many retirement accounts. This provision allows you to contribute

more than the standard limit, accelerating your savings during the crucial final years of


5. Invest Wisely: Allocate your contributions to a diversified portfolio that aligns with your risk

tolerance and retirement timeline. Seek advice from financial experts to make informed

investment decisions.

The beauty of compounding lies in its ability to magnify your contributions over the years.

Earnings generate more, creating a snowball effect that can significantly bolster your retirement

nest egg. Engage with retirement calculators and investment platforms to visualize the

potential growth of your savings.

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