Reader TTS

Putting savings first also means resisting the temptation to make early withdrawals from retirement accounts to cover big expenses like a dream vacation or a child’s college tuition. Reddy

recommends approaching such things in ways that allow your retirement funds to keep growing. For example, if your child takes out a student loan, you can help them repay it over time. Delay

that big trip until you’ve saved enough cash to cover it. The most effective savers “never say to themselves, ‘Oh, I'm going to dip into my retirement accounts,’ ” Peters says. “They

look at that as being off-limits.” 6. AUTOMATE YOUR SAVING It might sound counterintuitive, but the best savers don’t spend all their time thinking about how to save. “The folks that really

do well when saving for retirement save without thinking about it,” Peters says. That’s one of the big advantages of workplace retirement plans, which take money out of your paycheck and

deposit it directly into an investment account. The most successful savers not only enroll in a 401(k) or similar plan if available; they preset their contributions to increase each year,

says Mike Shamrell, vice president of thought leadership for Fidelity Investments. With this “automatic escalation,” you can set your pretax contribution to go up by, say, a percentage point

each year, up to a maximum (typically 10 percent or 15 percent). Among Fidelity clients who boosted their contribution to a retirement plan in the third quarter of 2023, 73 percent had set

the rate to increase automatically, Shamrell says. 7. FIND MULTIPLE WAYS TO SAVE The most effective savers look for more than one savings vehicle. An emergency account is important, but once

it has enough to cover three to six months’ living expenses, you may not need to keep pouring money into it, Peters says. You could plow those funds instead into a 401(k) or other

retirement account that will provide a better return over time. Once you’ve maxed that out, explore other vehicles such as annuities, mutual funds, brokerage accounts and certificates of

deposit (CDs). Health savings accounts (HSAs) are another option, utilized by nearly half of the savers polled by Principal. If you have a high-deductible health plan, you can make pretax

contributions to an HSA and withdraw from it at any time, tax-free, to cover qualified medical expenses, including deductibles and copayments. You’ll pay taxes, and a tax penalty, if you

take money out for other purposes — until you turn 65, after which you can withdraw from an HMA for nonmedical expenses with no penalty, just regular income tax.