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Saving for retirement:

The tendency when you feel like you are behind is to try to compensate by over-correcting.

Sometimes, you may try to do too much. Like going from zero retirement saving to maxing out your 401(k) and trying to live on 50% of your salary.

While the thinking may be right (save and invest more), the implementation is too drastic (no ramp-up period). You should give yourself some time to adjust to the change.

For most people, going from zero to 50% savings in one month is unsustainable.

Here are six things you can do if you are behind on retirement savings:

1. Increase your retirement contributions

Increase your 401(k) contribution if you are not at the maximum, but do it gradually—like by 1% per year or the amount of your annual raise. (Then set a recurring reminder to increase it.) If you set it too high at first, when you get your reduced paycheck, you can call HR and change it back.

Gradually increase your contributions when you can, with a target of the maximum contribution of $19,000 for 2019.

If your employer offers a 401(k) and you are not utilizing it, you are leaving money on the table—especially if your employer matches your contributions.

2. Take advantage of other employer savings plans

One of the best features of the 401(k) is the fact that you contribute via payroll deduction. Since the funds never hit your checking account, you never see them. They are automatically invested.

If your company has an Employee Stock Purchase Plan, look into that too. Some companies offer a discount on the stock investment. Just don’t invest too heavily in your company’s Employee Stock Purchase Plan, even if the company’s stock is doing great. Remember what happened to the employees at Enron who had all of their retirement savings invested in the company’s stock.

Another way to hack your paycheck is to set up an automatic payment to your savings account. If your employer doesn’t have this feature, do it yourself and set up an auto-transfer from your checking to a savings account the day after your paycheck hits.

The key is to set up automatic investing systems so you don’t have to think about investing on a regular basis.

3. Earn more money  

Work towards getting a promotion, raise, or bonus at work.

Increasing your take-home pay by even $10,000 per year is significant. Since raises are often based on your current salary, a 3% raise on $100,000 is $3,000 per year, but a raise on $110,000 is $3,300 a year. The benefits of a raise add up over time.

4. Get a side hustle and put 75% of it toward your retirement savings

Start a side hustle to bring in extra money. Rent out your basement using Airbnb, teach a class on Udemy, write and sell an ebook, become a drop shipper on fulfillment by Amazon (FBA), or sell things on eBay.

Resist the urge to spend some of the extra funds on things you want right now. Instead, carve out the majority of the funds to invest for the future in a Roth IRA (if you qualify) or another investment account.

5. Reduce your major expenses

Review your budget and major expenses to find creative ways to cut your living costs.

• Consolidate your credit card debt to a lower interest rate credit card
• Refinance your mortgage to a lower, fixed interest rate
• Investigate cheaper car insurance options

6. Get healthy and fit

We normally wouldn’t think of getting fit as a retirement plan. A study by Fidelity Investments estimates that the average couple who retired in 2018 will spend $280,000 on medical expenses in retirement. Reduce those expenses by getting fit, healthy, and strong now.

Use your employee benefits. Take advantage of any company-sponsored wellness plans and/or your medical insurance benefits. Get regular physicals. Use all of the preventative care options available with your medical insurance—they are often at no out-of-pocket cost.

Getting fit can help prevent disease, too. Exercise, according to Harvard Health, has been shown to reduce the chances of heart disease, stroke, and diabetes. Exercise that gets your heart pumping can also improve your cognitive function and reduce the “brain fog” that many people experience as they get older.

7. Protect your income and assets

Even with insurance, an unexpected expense can hurt your budget. Review your homeowners, auto, life, and disability insurance coverage, deductibles, and premiums to make sure you are covered in the event of accident or illness.

Think you’ll never save enough money to retire? Think again. Here are several places where you can retire sooner than you think.