5 Painless Ways to Increase Retirement Savings

Try these strategies to save more without cutting back your lifestyle.

Saving for retirement is simple. All it takes is saving 15 percent of your income starting in your 20s to retire comfortably at age 65. The problem is that simple doesn't mean easy.

Study after study tells us that most Americans are not saving enough for retirement. Many people aren't saving at all. We know that retirement is heading our way, yet we can't seem to translate the simplicity of retirement savings into action.

There are undoubtedly many reasons for our collective inaction. Chief among them is a lack, or a perceived lack, of money. In other words, saving money is hard. Here are some suggestions to help make retirement savings a little less painful:

Make increases automatic. Many 401(k) retirement plans allow for automatic increases in the amount employees contribute. Automatic escalation programs will automatically increase your savings rate each year by a predetermined amount. For some plans, employees are included in the escalation program by default, although this is the exception. For others, employees can elect to participate in the auto escalation program.

Save part of a raise. For those who don't have access to the escalation program, a simple alternative is to increase savings with each pay raise. If you save 100 percent of your pay raise, take-home pay will still rise if the savings goes into a tax-deferred account. Saving less than the full pay raise allows for an increase in retirement savings while further increasing after-tax income at the same time.

Increase savings after debt repayment. It's a great feeling to pay off debt. That's particularly true with credit card debt, which often comes with double-digit interest rates. 
The problem is that it's easy to spend the extra money that comes with paying off debt without knowing where the money goes. It somehow just vanishes into our monthly budgets. Avoid this disappearing act by increasing retirement contributions by the amount of your former debt payment.

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