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3 Ways To Save More For Retirement

Updated: March 2020

Icon - Question.

I'm past mid-career and now realize I may need to save more to retire comfortably. What options should I consider?

Allstate agent Odis Mack.

"It's smart to consider increasing your retirement contributions while you're still working and can adjust how much you put away for the future," says Odis Mack, an Allstate agency owner in Houston, Texas. "But you're not alone in feeling behind. Lots of folks in their 40s and 50s focus on buying homes, raising kids and maybe paying for college tuition," he says. "Retirement investing may get put on the back burner."

Video Transcript


We all want to enjoy our retirement. But how can you make sure you'll have enough savings?

First, make sure you're contributing to your company's 401(k) plan.

Some employers may also contribute to employees' 401(k)s with a match up to a certain percentage. Consider investing at least enough to receive your company's match.

Along with a 401(k), you may be able to open your own individual retirement account, or IRA.

With a Roth IRA, you deposit income that's already been taxed. In retirement, you won't pay taxes on qualified withdrawals.

With a traditional IRA, you can make pre-tax contributions, but distributions during retirement will be taxed.

Annuities are another way to save for retirement. An annuity is a contract between you and your insurer that can be used to provide income during retirement.

Whether you invest a lump sum or make periodic payments, annuities may help create a guaranteed, stable income stream for a fixed period of time.

However you choose to invest your money for retirement, start as soon as you can. That way, you may set yourself up for a more bountiful retirement.


An Allstate agent can answer coverage questions and help you find ways to protect what matters most.

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You have a variety of retirement options, says Mack. But first, he encourages you to set up an emergency fund of up to six months’ worth of essential living expenses in a savings account.

“You don’t want to borrow from your retirement account if you hit a financial snag,” he says.

You also may want to consider these options:

Your Workplace Retirement Plan

“Your company 401(k) should always be the first place you invest for retirement,” says Mack.

Why? It’s easy to have your contributions deducted automatically from your paycheck, and many companies offer a match on employees’ contributions.

“Always, always contribute at least enough to your work plan to get that match — it’s free money,” advises Mack.

And, if your company retirement plan has a wide range of investment options, Mack suggests increasing the amount you sock away until you’re investing up to 15 percent of your gross salary.

Another option Mack likes: If you’re age 50 or older, you may be able to make additional “catch-up contributions" to your 401(k), according to the Internal Revenue Service (IRS). The agency notes that older employees may be able to contribute up to $6,000 extra per year to their plans to help ensure that they have enough for retirement.

One way to be sure you're investing enough to retire comfortably: Have a financial professional review your plan and help you decide how to help reach your goal, says Mack.

Individual Retirement Accounts (IRAs)

In addition to your employer’s retirement plan, you may be able to open your own retirement accounts, notes Mack. “Through Allstate, for instance, we give you access to more than 900 different mutual funds, so you can really diversify your retirement investment plan,” he says. Some options:

  • Roth IRA. This is one of Mack’s favorite retirement options after your workplace plan. “You don’t get a tax break up front on the money you invest in a Roth, but all of your contributions and your fund’s earning may be income-tax free as long as you meet the program's requirements for withdrawing money during retirement," he says.

Roth IRAs have rules on income eligibility and annual contribution limits. It's a good idea to check with your financial professional before planning contributions or withdrawals. Like 401(k)s, IRAs let you make additional "catch-up contributions" if you're age 50 or older, according to the IRS.

  • Traditional IRA. Like a 401(k), you may earn an annual tax deduction on the money you invest in this account, says Mack. Your money is taxed later, when you withdraw it during retirement. If you switch jobs, you may be able to roll over all or part of your work 401(k) to a traditional IRA, says Mack.

In all of the above accounts, Mack says you can typically choose to invest in individual stocks or bonds, or mutual funds.


You also have another option for bolstering your retirement nest egg, says Mack:

  • Annuities. If you're concerned about income from your investment accounts fluctuating over the years, an annuity may be helpful, says Mack. These accounts can create a guaranteed, stable income stream. How long the income payments last depends on the type of annuity plan that you purchase. You may be able to choose a particular period of time (say, 10 years) or select a plan that pays out for your entire lifetime.

However you choose to invest more toward your retirement, do it as soon as you can, says Mack. "You may need to make some trades to be able to afford to invest more — such as downsizing your house after the kids leave or working a few extra years — but it may be worth it,” he says. “If you make some of those hard choices now, you can save more for a fun and happy retirement later."

Related Resources:

This content is for informational purposes only and may not be applicable to all situations.

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