1. Take advantage of catch-up rules if you qualify. Laws governing retirement accounts in the United States allow individuals 50 and older to contribute more to their retirement accounts than they’re eligible to contribute prior to turning 50. Bankrate notes that current laws allow individuals over 50 to contribute an extra $1,000 per year to a traditional or Roth IRA and an extra $7,500 annually to a 401(k), 403(b) or 457(b) account. In Canada, individuals can contribute the maximum to a Registered Retirement Savings Plan (RRSP). According to the National Bank of Canada, individuals can contribute up to 18 percent of their annual income to an RRSP, and those contributions are deducted from taxable income. That means individuals are potentially saving more for down the road and paying less in taxes today.
2. Itemize your tax deductions. The online financial resource Investopedia notes that taking the standard deduction is not for everyone. Individuals with significant amounts of mortgage interest, business-related expenses that are not reimbursed by an employer, and/or charitable donations may lower their tax obligation by itemizing their deductions. That reduction in tax obligation allows individuals to redirect those funds to their retirement accounts.
3. Cut back on discretionary spending. Perhaps the simplest, though not necessarily the easiest, way to catch up on retirement savings is to redirect funds typically spent on discretionary expenses like dining out or travel into retirement accounts. One way to feel better about this approach is to remind yourself that the less money spent on dining out and travel now means more money will be available to spend on such luxuries in retirement.