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The 5 Fastest Ways to Save Money For Retirement

The 5 Fastest Ways to Save Money For Retirement

Clock with jar full of coins

There are all kinds of data floating around out there with advice on where to move when you retire, what you should do to save the most cash and where you should live to smartly keep control of your net worth. The last point is the perfect starting point when it comes to designing your retirement savings plan. What good is it to enjoy retirement in the middle of nowhere just to save some cash? Once you know where (or have an idea of a handful of places where you may want to retire), you can begin setting a plan for retirement.

Consider where your quality of life will be the highest, and always factor in where you will be happiest. It may not always be where you think or were led to believe. 

In fact, according to a study from, the top 15 metro areas have an average monthly state-level Medicare premium of $15.90, which is 21.6% below the average city in its own study (the average city clocked in at $20.30). It found that the top metros actually fared better when it comes to health care costs. Perhaps a big city may not be so bad after all. 

Moving away from your favorite city to a rural area or beachfront locale may not work for everyone in every situation. It all comes down to where you will be the happiest, perhaps closer to family and friends or the places you love (whether that’s beaches, mountains or high-rise skylines).

You may be able to retire earlier than you think by building a bigger nest egg from now instead of focusing on how to pinch costs later.

If you take the right steps to get you there, ditching the daily grind may be a sooner possibility than you once imagined. Here are 5 of the fastest methods to get you closer to retirement faster than you originally planned.

1. Plan ahead

What do you actually envision for your life once you retire? Is it relaxing on the beach with a book in hand? Is it hiking the biggest mountains or exploring the most exotic museums of European capitals? Perhaps, you want to spend each and every day enjoying your kids and grandkids no matter what city you are in at the moment. We all have different life goals, and understanding what those are (even if you just have a general idea since it’s hard to know what exactly you may want in the future) from the beginning can be helpful in finding the fastest ways to save money for retirement.

Starting early is imperative to assuring you have the maximum resources at hand when you retire. The smartest among us start putting money away for retirement as soon as they finish college and begin their career. This is how you allow compounding interest and the value of time to work in your favor. The earlier you start, the more time your money has to grow. It’s amazing how a small, well-invested sum in your 20s can grow to something much larger by your 50s and 60s. Consider putting $100 a month into an investment account (you can even put less; it depends what you can afford). In a few decades, that will compound to a six-figure some all because you followed a disciplined approach in investing and planning for your retirement early.

Another part of planning ahead is avoiding debt when you retire. Pay off your big expenses before you retire. Don’t stop your regular flow of income with debt in hand. That is a surefire way to eat up your cash reserves quickly and not use them for the grand plans you may have originally imagined for retirement. This means you’ll need to pay off car payments, mortgages, credit card debt and other loans before you even think about retiring. The spigot of income needs to flow long after you have paid off debts so that it contributes to the future nest egg you will rely on when you stop working.

2. Plan a budget

How much money do you think is necessary for your ideal life including groceries, entertainment, utilities and travel? Be sure to allow for an emergency plan if the economy shifts or health outlooks change. If you have a range for what is necessary to maintain a weekly and monthly budget, it can help you plot what you need to save now to achieve what the goals would be then.

Depending on where you want to retire, the amount of money you will need can vary. If you move to a state with certain tax breaks, this could help keep more money in your wallet. There are tax implications for different states so be sure to consider the possibilities for different states early enough so that you can put away the savings you need and plan the necessary budget for each scenario.

Even a state’s particular income tax regulations can have strong implications in retirement. Let’s say you take on a part-time job and are still earning a small income. You would be better off in a state that does not charge income tax than one that has higher taxes. The money you earn should go toward the things you want to enjoy rather than to the government, especially once you have retired.

retirement binder with glasses

3. Contribute to a 401K

Using pre-tax money to invest in your retirement is a pro-tip move that is essential if you want to live the good life for your retirement. This is a great way to assure that you still have the funds to enjoy life while working since the money is pre-tax and your take-home amount to spend is not affected as much as if investing with after-tax money). If your employer offers a match, be sure to take advantage of this to the fullest. This is free money that is silly to not take advantage of since often you can get a match as much as 5% of your salary.

Consult with a financial advisor to help plan out your investment and savings strategy. There may be other opportunities in the investment world where you can contribute pre-tax money for retirement savings that proves beneficial. Consider opening an IRA or Roth IRA where some of the contributions may even be tax-deductible. Both of these can help you toward your retirement savings goals, but they depend on your current income. 

When you pay yourself first and put money away for retirement savings before using it for other things you want or need, you can better plan for your future retirement. Make use of online tools like the personal retirement calendar from Merrill that can help you determine how much you need to put away to achieve a particular retirement savings goal.

4. Expect the unexpected

Market investments fluctuate, and this cannot be the only thing one relies on when planning for retirement. Having a diversified portfolio is a smart strategy, but so is having investments in real estate, precious metals or other sources so that if one does not perform as planned, you are not left in the dark. Your nest egg must come from various resources so that you can have the confidence that you can retire early.

Social security and retirement payouts are another part of a retirement strategy, but there is no guarantee that they will continue in the same manner for decades to come. 

Health care costs as you get older will not be the same as earlier in life. This means you should plan for potential sickness, hospitalization costs, home care or expensive medications. Hopefully, you won’t need funds for any of that, but being prepared is paramount for living a comfortable and happy retirement life. A smart move is to save enough for these situations so that you can live for 3-6 months with these higher expenses without further income opportunities.

5. Rely on loyalty programs

From airline frequent flyer programs to hotel and credit card loyalty programs, the miles and points you earn now are like cash. Don’t spend them wastefully now as these can help to offset the cost of all the travel that you plan during retirement. Credit card loyalty programs often treat their points like cash, which means you can spend them (often at the rate of a penny per point). Be sure to earn as many miles and points as you can now. If you’re not a member of a loyalty program, be sure to join so you don’t leave free money on the table.

Other programs like Fetch allow you to earn rewards in the form of free gift cards by scanning receipts from restaurants, shops and grocery stores among other places. The more you scan, the more you earn toward a gift card to some of your favorite retailers like Amazon, Best Buy, Starbucks and Target. Why pass up on free cash just for a few extra seconds of your time? It’s a great way to earn some extra spending money while you are still putting money away for retirement savings.

This may not be the biggest contributor to your retirement savings (unless you win 1,000,000 Fetch points), it certainly helps and adds an entertaining element of fun to saving money. It’s way more interesting than old-fashion coupon clipping! And if you refer friends and family, you can earn bonus points leading to more free gift cards.