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5 Ways to Rebuild Your Retirement Savings

July 02, 2019 · 4 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

5 Ways to Rebuild Your Retirement Savings

Life happens. A natural disaster, an emergency surgery, a roof leak—all sorts of sudden, unexpected situations could leave you scrambling for funds and needing to dig into your retirement fund. If you’ve lost your life savings or discovered you aren’t on track to have the money you’ll need for the retirement you desire, then we’ve created this post for you!

Here, you’ll find five ideas that could help you rebuild lost retirement savings, including:

•  Reviewing your budget

•  Contributing to your 401(k) or IRA

•  Asking for a raise

•  Delaying retirement

•  Reviewing your portfolio

As a bonus tip, it might help to visualize what you want your retirement years to be like. Do you imagine traveling the world? Relocating to a place where it’s sunny and warm—or where you’ll be near friends and family? No matter what appeals to you, keeping your unique vision front of mind could serve as a guiding light as you develop the strategy to rebuild your retirement savings.

Reviewing Your Budget

In the busyness of life, it can be easy to get into the set-it-and-forget-it mode of thinking. You might not have started saving for retirement yet, or you may have created a budget that has worked okay for you in the past and haven’t made any changes. If that sounds familiar, then you may be pleasantly surprised by the possibilities.

Could you, for example, consolidate your credit card balances into a personal loan ? If so, how much would you save? If you took that amount and put it into your retirement account, more money could be going toward investing in your own future.

Are you paying off student loans or helping your child to do so? Again, refinancing might free up cash flow that could go into retirement savings.

What apps, subscriptions, and the like could you live without—ones you might not even use, anymore? In total, how much more could you invest in your own retirement each month or year? What might be the cumulative effect of all of your budget-cutting strategies?

As a related strategy, are you close to paying off a large purchase? This could include a boat, an RV, or even your home. If so, you could consider earmarking whatever you’ve been paying monthly for that large purchase to go into your retirement account. If it doesn’t seem possible to commit the entire amount each month to your retirement savings, what percentage might seem doable?

SoFi has built a Recession Help Center
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through this uncertain time.


Contributing to Your 401(k) or IRA

If you have a 401(k) or other employer-sponsored retirement plan, you are allowed to invest up to $19,000 of your pre-tax salary annually, a cap that the IRS says may be increased in the future because of cost of living increases. Then, when you reach the age of 50, your annual contribution limit is boosted to $25,000. Increasing your retirement contributions also reduces the amount of your income that’s taxable .

If you’re contributing to an IRA , you can contribute $6,000 annually, or $7,000 if you’re 50 or older. This is true for both traditional and Roth IRAs. Note that, if you have an employer-sponsored 401(k), you can also invest in an IRA .

And, if you reach the limits of your retirement plans with tax advantages in a particular year, you could still continue to build up your reserves with other forms of investments , whether stocks, bonds, mutual funds, or something else.

In other words, you wouldn’t have to let the limits set by the IRS stop you from investing if you have funds available for that purpose. You might just need to invest another way until the next year’s retirement-investment opportunity returns.

Asking for a Raise

Ideally, yes, your hard work would automatically be recognized and your boss would give you a raise without you needing to ask. But, it doesn’t always work that way—and SoFi has created the ultimate guide on how to get a raise.

Highlights of the guide include:

•  Being clear about what you deserve in compensation. It might help define your value by researching what other professionals with your skills, experience, and education are receiving.

•  Gathering facts. This could include the financial information we’ve mentioned, plus your accomplishments, what others value about your work, and what you plan to contribute to the company going forward.

•  Building up your confidence. It might help to practice your pitch for a raise with trusted friends and colleagues.

•  Making an appointment. You might want to set a time to give your data-based, professionally expressed, well-timed request for a raise.

Then, you could invest any raise (or bonuses) into your retirement savings.

Delaying Retirement

If you were born in 1960 or beyond, then your full retirement age for Social Security benefits, according to the IRS, is 67. There are also delayed retirement credits that you can take advantage of. In this scenario, you could earn 124% of your monthly benefit if you delay retirement until the age of 70—a delay of 36 months.

You may decide that, yes, you’re going to keep working in your current career until the age of 70. Or, you could switch to an encore career, one that brings about a change of pace for you and allows you to focus on a specific passion, one that might offer more freedom and aligns with values you hold dear.

It could involve consulting or freelancing, or otherwise using skills, contacts, and experiences in a new way, possibly even telecommuting or working a more non-traditional schedule.

This might help increase Social Security benefits while working in an exciting new career. You could also use some of your earnings to invest in retirement savings.

Want to brainstorm encore career possibilities? SoFi offers complimentary career coaching.

Reviewing Your Portfolio

It might help to review your retirement portfolio to determine if you’re investing in the best way, with “best” defined differently for each person. Each person has their own risk tolerance, and each person’s financial situation is unique.Your portfolio review might take those factors into account.

Perhaps you also have a wealth account, an investment vehicle where you contribute after-tax funds. If so, it might make sense to review that portfolio, as well, to determine if you may be able to accelerate growth.

As you look at your portfolio, would it become even more meaningful if you focused on active and automated investing platforms that could help you as an investor without paying fees.

Get started today with SoFi Invest!


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