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10 ways to start saving for retirement

What we'll cover

  • How to save for retirement

  • Tips to automate your savings

  • Using a robo portfolio for retirement savings

You might hear saving for retirement is like running a marathon or climbing a mountain — a task that requires serious training and intense commitment. But thinking of it that way can be daunting. Instead, think of it as learning a new skill, like playing an instrument. It's about being consistent and diligent with small, regular efforts over an extended period. While you may not see significant gains day-to-day, you're always making progress.


If you aren't exactly sure how to begin, try one of these 10 ways to jumpstart your retirement planning for the future you want.

Think of saving for retirement as learning a new skill, like an instrument. It's about being consistent and diligent with small, regular efforts over an extended period.

1. Start saving today

It doesn't matter how old you are — if you haven't started saving for retirement, start now. You might feel guilty if you're getting started later in life, but no matter how old you are, now is sooner than later. If you’re age 50 or over, catch-up contributions can help you make up for any lost time. 


Learn more about how to start saving money and read on to learn how to start a retirement fund.  

2. Contribute to your 401(k)

Does your company offer a 401(k)? A 401(k) is an employer-sponsored retirement savings plan that provides tax benefits. You can contribute up to a limit of $22,500 in 2023, but you can contribute more — $30,000 — if you are 50 or older.


How does it work, exactly? You sign up for automatic deductions from your paycheck through your workplace plan. You can get a tax break when you contribute money or withdraw after you retire. 

  • Traditional 401(k): 401(k) contributions to a traditional 401(k) plan are taken out of your paycheck before taxes, so your money grows tax-free. They also lower your taxable income for the year. However, you must pay taxes on that money when you retire — you can't get away with paying zero taxes on that income forever.

  • Roth 401(k): A Roth 401(k) allows you to contribute after-tax income to an account. You can take the money out tax-free in retirement. 

The IRS can charge you income taxes only once, so it's up to you to decide whether you'd like to pay taxes with pre- or post-tax dollars.


You can’t take distributions from your account until you turn 59½. If you do, you’ll have to pay additional taxes and possibly penalties.


Contact the human resources office at your company to learn more about setting up a workplace plan.

3. Check for employer match

As noted earlier, an excellent way to build retirement savings is with an employee-sponsored retirement account, like a 401(k) — especially if your employer offers a match. The match gives you extra funds that go into your retirement fund. If your employer provides this benefit, begin by contributing at least enough to take advantage of the entire match, so you don’t leave any money on the table.

4. Open an IRA

If your work doesn’t offer a match or retirement plan, you might want to open a tax-advantaged retirement account, such as an Individual Retirement Account (IRA). With a traditional IRA, your money grows tax-deferred, meaning you pay taxes when you withdraw during retirement. With a Roth IRA, you contribute after-tax dollars, and it grows tax-free. Whichever IRA account you choose, opening a tax-advantaged retirement account is a smart first step to getting serious about saving for those golden years.

5. Plan your asset allocation

Building up an investment portfolio can be tricky if you aren't sure where to begin. But thinking through your balance of stocks and bonds is an excellent way to give yourself some direction. 


You might consider the Rule of 110. With this method, all you do is subtract your age from 110. The resulting number can help give you an idea of what percentage of your portfolio to direct toward securities like stocks with the remaining percentage going toward more conservative investments, such as bonds. Adding in  exchange-traded funds (ETFs) can help you further diversify your asset allocation. Keep in mind the rule of 110 is just a starting point — always adjust for your own unique situation.

6. Automate your savings

Automation is a saver's best friend. By setting up a direct deposit into your retirement account, you won't have to worry about putting away a portion each month for retirement. You also eliminate the mental component (that can be a savings roadblock) of having to move money yourself from checking to savings, making it even easier to grow your retirement fund.


Ally Bank makes saving easier with smart saving tools in our Savings Account. These features help you organize, optimize and analyze your money to push your savings further. 

7. Set a goal

What is your goal? How much do you need to live off in retirement? 


Many experts recommend saving 10% to 15% of your yearly pre-tax income. If you're just starting, you may want to use that percentage as an end goal, not a starting point. Instead, start with a percentage you can manage (and if you have an employer match, a contribution that takes advantage of that is a smart starting point). From there, aim to increase your contribution by 1% or 2% each year until you reach 15%.


Consider using a retirement savings calculator to help you outline your goals. A retirement savings calculator can help you calculate precisely how much you'll have in savings when you reach your target retirement age and whether your current savings rate will support your standard of living in retirement.

8. Stash extra cash

The cash you receive as a salary bonus, tax refund or gift is perfect for your retirement fund. Why? Because if it's not money you normally live on, you won't miss it if it's in savings. Windfall money is an excellent opportunity to boost your nest egg — and you'll be glad you did when you see the power of compounding take effect over the years.


Directing any new income toward your retirement fund (whether an IRA or other savings method) is an effective way to ensure your contributions continue to grow without impacting your lifestyle. And, like windfall money, you won't even notice it's not in your bank account.

9. Reevaluate your spending

Suppose you want to start saving for retirement or increase your contribution, but you don't expect any upcoming income changes. In that case, you may need to update your budget to identify money you can direct toward savings. This may require a slight lifestyle adjustment, but even allocating $25 or $50 a month toward retirement is a worthy start. 


The thought of saving for retirement can feel unrealistic when you have high-interest debt like credit card debt . While you can save money and pay off debt simultaneously, it may be wise to focus on paying down high-interest debt before bolstering your retirement savings. Then, once you have any high-interest debt out of the way, you can redirect the money used for your credit card payments toward retirement. Not only will you have more money to save, but you can also enjoy the motivational boost of relinquishing the burden debt can place on your finances.


Use budget templates to keep your finances on track. 

10. Use a robo advisor

If you're investing for the first time — in an IRA, for instance — you don't have to go it alone. Consider enlisting the help of a robo advisor. With an Ally Invest  Robo Portfolio , you receive the support of human experts and top-notch robo technology to build and manage a diversified portfolio for you. All you have to do is make contributions, and we'll keep your IRA investments aligned with your goals. 


Saving for retirement isn't an insurmountable mountain. It's not a long, winding race you need to battle. It's an ongoing process that takes persistence and small, steady contributions — week by week or month by month. If you have the resolve to get started and learn as much as you can about how to start saving for retirement, you're on the right track to mastering retirement savings.

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