You want to not only have enough money to live comfortably when you retire, you also want a little bit more. Maybe you want enough to travel, start that side business you always talked about or purchase your dream home since you'll have time to enjoy it. Whatever your retirement dreams are, maximizing your retirement income can help.

Here are some ways to do just that.

TUTORIAL: Retirement Planning

Start Saving as Soon as Possible
You've no doubt heard of the benefits of compound interest. The key is that the sooner you start saving, the sooner you start gaining the interest and the sooner that interest can start compounding. Two years makes a difference, but five or 10 years makes a big difference in the amount you end up with upon retirement. So even if you're on a tight budget, start stashing at least a little bit of it away in a retirement account. Have it automatically deducted from your paycheck, so you're not tempted to spend it. You're investing in your own future. (For related reading, see Accelerating Returns With Continuous Compounding.)

Start Saving With a Lump Sum
This one isn't always possible, but if you happen to have a nice lump sum of money come into your possession, consider using it as the base of your retirement fund. Graduations and weddings often result in gifts of cash, so use these as the seed of your retirement account for increased compound interest and a larger return when you retire.

Figure Out Which Account Works for You
According to David Braze of The Motley Fool, there are 11 different types of IRAs. For example, the Spousal IRA allows for contributions for your non-working spouse to a separate IRA. The Coverdell ESA formally known as Education IRA allows you to make contributions of up to $2000 a year which the IRA's beneficiary can withdraw, untaxed, to use toward a program of higher education.

Get Matching Contributions
Two types of IRAs, the Simplified Employee Pension (SEP-IRA) and the Savings Incentive Match Plan for Employees (SIMPLE-IRA), allow employers to contribute to employee IRAs. Obviously, having an additional or matching contribution to your IRA will increase the value, so be sure that you ask your employer to do so.

Avoid Getting Overtaxed
There are different tax laws for different types of IRAs and 401(k) accounts; the traditional IRA allows for some deductions on qualifying contributions, but withdrawals will be taxed. The Roth IRA, on the other hand, does not allow for tax deductions on contributions, but it does provide for tax-free withdrawals on qualified withdrawals. (For related reading, see An Introduction To Ineligible IRA Contributions.)

Talk to a Pro
It's a good idea to do your own research, educate yourself on your options and make informed decisions. You can certainly understand the differences between the various types of IRAs. You can get advanced help from a financial professional whose education and career focus on planning and saving for retirement. Get the most out of a financial consultant by doing your homework first. Come to the meeting with some basic understanding of the options, your own financial goals and your specific questions about how best to achieve those goals. With your consultant's insight and your own intelligence, you'll be able to find the best strategies for maximizing your retirement income.

Look Outside the Box
Don't be afraid to look at other options for raising and saving your retirement income. You can invest in real estate, become a venture capitalist, raise interest by lending your own money, or invest in items that have appreciable value in order to grow your retirement income. The best thing to do is become active in overseeing how your retirement income grows. Passivity is deadly. Get interested, get involved, educate yourself and start managing your future now. (Find out how VC firms make the market go round, and round, and round. For more, see Cashing In On The Venture Capital Cycle.)

The Bottom Line
Having enough money to live comfortably when you retire isn't enough for most people. It's also important to have a little extra so you can fulfill some of your life long dreams like traveling when you retire. Whether it be getting advice from a pro or saving earlier, there are many simple ways to make sure you're prepared when you retire.

Related Articles
  1. Mutual Funds & ETFs

    Top 4 Retirement Income Mutual Funds

    Review four of the top retirement income mutual funds available on the market today, including those with tax advantages and ambitious income goals.
  2. Investing

    What a Family Tradition Taught Me About Investing

    We share some lessons from friends and family on saving money and planning for retirement.
  3. Retirement

    Two Heads Are Better Than One With Your Finances

    We discuss the advantages of seeking professional help when it comes to managing our retirement account.
  4. Retirement

    5 Secrets You Didn’t Know About Traditional IRAs

    A traditional IRA gives you complete control over your contributions, and offers a nice complement to an employer-provided savings plan.
  5. Retirement

    Using Your IRA to Invest in Property

    Explain how to use an IRA account to buy investment property.
  6. Retirement

    How a 401(k) Works After Retirement

    Find out how your 401(k) works after you retire, including when you are required to begin taking distributions and the tax impact of your withdrawals.
  7. Retirement

    Read This Before You Retire in the Philippines

    The Philippines has a warm climate, a low cost of living and plenty of people who speak English. What to do next if you think you want to retire there.
  8. Retirement

    4 Books Every Retiree Should Read

    Learn more about the current financial situations retirees are facing and discover four books that every prospective and current retiree must read.
  9. Retirement

    Are Fees Depleting Your Retirement Savings?  

    Each retirement account will have a fee associated with it. The key is to lower these fees as much as possible to maximize your return.
  10. Stock Analysis

    Why did Wal-Mart's Stock Take a Fall in 2015?

    Wal-Mart is the largest company in the world, with a sterling track-record of profits and dividends. So why has its stock fallen sharply in 2015?
  1. Can a 401(k) be taken in bankruptcy?

    The two most common types of bankruptcy available to consumers are Chapter 7 and Chapter 13. Whether you file a Chapter 7 ... Read Full Answer >>
  2. When can catch-up contributions start?

    Most qualified retirement plans such as 401(k), 403(b) and SIMPLE 401(k) plans, as well as individual retirement accounts ... Read Full Answer >>
  3. Who can make catch-up contributions?

    Most common retirement plans such as 401(k) and 403(b) plans, as well as individual retirement accounts (IRAs) allow you ... Read Full Answer >>
  4. Can you have both a 401(k) and an IRA?

    Investors can have both a 401(k) and an individual retirement account (IRA) at the same time, and it is quite common to have ... Read Full Answer >>
  5. Are 401(k) contributions tax deductible?

    All contributions to qualified retirement plans such as 401(k)s reduce taxable income, which lowers the total taxes owed. ... Read Full Answer >>
  6. Are 401(k) rollovers taxable?

    401(k) rollovers are generally not taxable as long as the money goes into another qualifying plan, an individual retirement ... Read Full Answer >>

You May Also Like

Trading Center