Saying "I do" means you're ready to tackle life's biggest adventures as a team — and building a robust retirement plan is one of the most important. If your retirement savings feel a bit thin, don't just worry about it — do something about it. This is your chance to turn a concern into a collective strength. We're going to break down common strategies for increasing your savings now so you can enjoy the rewards later. This article is your playbook for taking proactive steps to secure your financial future, starting today.
Why Bother with Catching Up Now?
Retirement might feel like a distant dream, but it creeps up faster than you think. Think of it like this: you're building a beautiful house (your retirement), and you've just laid the foundation. It might feel small now but the faster you build up those walls, the sooner you'll have the space you need. Delaying those contributions means you're starting with a smaller foundation, requiring more effort to get where you want to be.
Teamwork Makes the Dream Work: Your Catch-Up Strategies
Many couples find themselves needing to catch up on retirement savings. Here's how you and your partner can strategize:
Maximize Retirement Accounts: Maximizing contributions to 401(k)s and similar plans can be a highly effective approach. Contributing enough to receive the employer match is widely considered a key step in retirement saving.
Example: Sarah and Mark, both in their late 30s, realized they were behind on retirement. By increasing their contributions to their 401(k)s and opening IRAs, they were able to boost their retirement savings base.
Spousal IRAs: A Powerful Tool: Even if one spouse doesn't have earned income, the working spouse may be able to contribute to a Spousal IRA on their behalf, which can be a valuable way to increase retirement savings for both partners. This catch-up strategy is particularly beneficial for couples where one spouse stayed home to raise children or has a lower earning potential. However, it's crucial to remember that both spouses must file taxes jointly to be eligible for a Spousal IRA, and contributions are still subject to income limits. For traditional Spousal IRAs, these limits affect the deductibility of contributions, while for Roth Spousal IRAs, they determine eligibility.
Example: Suppose only Mark works. He can contribute to both his own IRA and Sarah's Spousal IRA, effectively doubling his contribution potential, assuming their combined income falls within the IRS guidelines for IRA contributions. This strategy helps them build a stronger retirement nest egg together.
Increase Savings Rates: Even if you can't max out your retirement accounts immediately, increasing your overall savings rate, even by a small percentage, makes a big difference over time.
Example: Lisa and David, a newly married couple, started saving an extra $50 a month. After one year, they were able to use their savings to pay off a small credit card debt they had for wedding expenses, freeing up more money to put toward retirement. With time and consistency, it added up!
Understanding Contribution Limits: Your Guide to Maximizing Savings
To help you stay on track, it is helpful to keep an eye on annual contribution limits. These limits, set by the IRS, change from year to year. For those aged 50 and older, “catch-up contributions” offer a valuable way to accelerate your savings beyond the standard annual limits.
Here are the most common contribution limits for 2025:
401(k), 403(b), 457
- Standard Limit: $23,500
- Catch-Up Limit (age 50+): $7,500
Traditional & Roth IRAs
- Standard Limit: $7,000
- Catch-Up Limit (age 50+): $1,000
Simple IRA
- Standard Limit: $16,500
- Catch-Up Limit (age 50+): $3,850
Note: For 401(k), 403(b), and 457 plans, a special “super catch-up” contribution of $11,250 may be available for those ages 60-63, depending on the plan’s rules. This is in addition to the standard limit.
The Power of Compounding: Remember, the beauty of both standard and catch-up contributions lies in compounding. Even these additional amounts, saved consistently over time, grow substantially due to the magic of compound interest. The earlier you start, the more significant the impact on your retirement nest egg will be.
This isn’t just about numbers; it’s about building a shared vision for your future.
Things to Remember:
- Open Communication is Key: Discuss your financial goals, values, and habits honestly. Perhaps even establish a “financial date night” once a month to review budgets, set up a shared spreadsheet, or watch a financial YouTube video together. This isn't just about numbers; it's about building a shared vision for your future. Consider that women often shoulder more of the "invisible labor" of financial management. Making sure both partners feel heard is crucial.
- Financial Autonomy Matters: Maintaining some individual financial accounts alongside joint ones is a preference for many couples as it preserves a sense of independence and can be especially important for women entering marriage with pre-existing assets or children from previous relationships.
- Time and Consistency Are Your Allies: Don't get discouraged if you can't change everything overnight. Celebrate small wins and remember that consistent effort over time yields significant results. Even if one partner is primarily focused on catching up, the other can support by acknowledging their effort and taking steps towards financial collaboration.
Your Next Step:
Consider taking a small step toward your retirement goals this week, such as researching your retirement plan options or exploring resources like a financial advisor or budgeting tools. Every little bit helps.
Remember, building financial security is a collaborative journey, and you've already taken the first step by recognizing the need to build your retirement savings now. Celebrate that! You’ve got this.
Learn more about the details of 401(k) Retirement Plans when you have the time.
Disclaimer: Contribution limits are subject to change. Always check the most up-to-date IRS guidelines or consult a financial professional for accurate figures and personalized advice.
Source Notes: This article provides general information. For tax, accounting, legal, financial, insurance or investment advice, consult a licensed professional. References to third-party books or resources are provided for informational purposes only.