Here’s What NOT Saving for Retirement in 2024 Might Cost You

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Skipping IRA or 401(k) contributions for even a single year could have major consequences. Read on to learn more. [[{“value”:”

These days, a lot of people are still having trouble paying bills and digging their way out of lingering debt. So it’s understandable that you may not have a lot of money to contribute toward retirement.

But if you don’t make a single contribution to an IRA or 401(k) plan this year, you might sorely regret it down the line. Here’s why.

When you lose the chance to grow your money

The problem with taking a year off from saving for retirement is that you lose out on the chance to invest the money you’re putting into your IRA or 401(k). Over the past 50 years, the stock market’s average yearly return has been 10%. Let’s say your portfolio can deliver the same return.

If you were to put $3,000 into a retirement plan this year and leave it alone for 30 years, you’d grow it into over $52,000. For all you know, that could be enough money to pay your retirement expenses for an entire year once you stop working. So skipping IRA or 401(k) contributions this year could leave you short on funds down the line — because in this example, you’re not just losing out on $3,000, but rather $52,000.

Try to eke out some money for savings

It’s definitely not easy to find the money for retirement savings when you have so many other pressing expenses to contend with. But some tips for finding money for retirement savings could include:

Picking up extra shifts at your job, if possibleGetting a side hustleSelling items you don’t needCutting a few non-essential expenses from your budgetMaking an existing expense more affordable (such as getting a roommate to split the cost of rent)Negotiating a raise with your employer (a strategy that might work if your pay didn’t go up at the start of the year)Using your tax refund to make an IRA or 401(k) contribution

Another thing it really pays to do when saving for retirement is put enough money into your 401(k) plan to snag your full employer match. That’s free money you can not only bank, but invest the same way you invest the money you contributed yourself.

Let’s say your employer will match up to $3,000 in 401(k) contributions this year. If you put in $3,000 so you get a total of $6,000 and you leave it invested at an average annual 10% return over the next 30 years, that sum will grow to almost $105,000.

Remember, you don’t have to come close to maxing out a retirement plan in 2024 if money is tight and that’s not in the cards. Of course, the more money you can put away, the better. But at the very least, try to contribute some amount so you don’t miss out on the chance to grow that money into a larger sum.

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