Smart Move #1: Consider Maxing Out and Catching-Up in Your 401(k) and IRA

Roughly one in 10 employees invests the full pre-tax contribution allowable each year in their 401(k) 1. When creating their retirement income plans, Fidelity found that investors in or near retirement who started saving early and consistently took advantage of savings opportunities — including tax-advantaged workplace savings plans, IRAs, employer matches and catch-up provisions — generally were better prepared for retirement.

Steps to take:

• Increase the amount you’re contributing to your 401(k). It’s easy if your retirement savings plan is serviced by Fidelity — log in to NetBenefits SM deductions.
• Find out how IRA earnings can help you save more towards retirement .

Smart Move #2: Save Now to Have More Later

The most common obstacle for saving for retirement is finding extra cash — and the most common solution is reducing your expenses and paying off debt.

Many customers were interested in learning that the benefits of making simple yet effective savings tradeoffs that invested over time, could really add up — such as putting off purchasing a new car for a couple of years, eliminating credit card debt, or taking a major vacation every other year.

In working with customers over the past year to develop more than 180,000 retirement income plans, Fidelity found that investors who are more confident and better prepared have followed a few simple, yet smart moves to help them ensure a more comfortable retirement. You may want to consider the following smart moves when building your retirement nest egg.

Steps to take:

• Learn how you can reduce expenses and pay off debt.
• See how different factors may affect the potential growth of your investments.

Smart Move #3: Make Your Asset Mix Match You

Avoid two common retirement savings mistakes — being overly cautious or taking excessive risks when deciding how much of your assets to invest in cash, stocks, or bonds. After coming to Fidelity for income planning guidance, two-thirds of investors changed or planned to change their asset allocations to better reflect their age, goals, and risk tolerance. 2

Steps to take:

• Use this worksheet to create a target asset mix that’s right for your timeline, risk tolerance and goals.
• Don’t let emotions get in your way when you make investment-related decisions.

Smart Move #4: Stretch Your Salary

While Americans generally don’t think about working in retirement, Fidelity is finding that some investors are planning to work to some degree — for several very good reasons. Some investors nearing retirement want to close the gap between their initial Social Security distributions and when employer pensions are scheduled to kick in. Others want the advantage of a regular income and subsidized health care benefits — even for just one more year.

Steps to take:

• Will your money last in retirement? Read about the five key risks to your retirement income.
• Find out how much your take home pay might change if you increase your 401(k) contribution .

Watch for another Smart Move for Retirement next week.