Retirement might feel far off, but it’s never too early to start planning for the future. Social Security is a good starting point, but relying on it alone may not be enough to maintain your lifestyle once you stop working. In fact, most people find that Social Security alone doesn’t cover all their expenses. As of November 2024, the average monthly Social Security payment is around $1,925 – that’s roughly $23,000 annually. While this amount can increase over time, it was never meant to be your only source of income. Here’s a look at three other ways you can boost your retirement savings and ensure a comfortable life once you clock out of the workforce.

1. Maximize Your Workplace Benefits

In the past, pensions were a common way for companies to help employees save for retirement. However, today, most employers offer 401(k) plans or other types of retirement savings options. With these accounts, you are responsible for saving and investing, but the good news is that many companies will match your contributions. For instance, an employer might contribute 50 cents for every $1 you invest, up to 6% of your salary.

Let’s break it down: If you earn $100,000 a year and contribute 6% ($6,000) to your 401(k), your employer adds $3,000. Over time, these employer contributions can add up to a significant amount. If you combine this with your Social Security benefits, you’ll be in a better position to cover your essential living expenses when you retire.

In 2025, the contribution limit for a 401(k) is $23,500 for people under 50. If you’re 50 or older, you can contribute up to $31,000, including a catch-up contribution of $7,500. This is an excellent opportunity to grow your retirement savings.

Moreover, some employers offer additional perks like stock options, restricted stock units (RSUs), or an employee stock purchase plan (ESPP). These benefits allow you to buy company stock at a discount, helping you grow your wealth further. Be sure to understand how these programs work and whether they’re right for you.

2. Open an Individual Retirement Account (IRA)

While your workplace benefits are an important piece of the retirement puzzle, they aren’t the only tool at your disposal. If you want more control over your retirement savings, consider opening an Individual Retirement Account (IRA). Whether you’re self-employed or working for a company, IRAs allow you to contribute a portion of your income to a tax-advantaged account.

There are two types of IRAs: Traditional IRAs and Roth IRAs. The main difference between the two is how they are taxed. In a Traditional IRA, you can deduct your contributions from your taxable income in the year you contribute, but you’ll pay taxes when you withdraw money in retirement. A Roth IRA, on the other hand, doesn’t give you an immediate tax break, but your withdrawals are tax-free when you retire.

The annual contribution limits for IRAs are lower than those for 401(k)s. In 2025, you can contribute up to $7,000 to a traditional or Roth IRA if you’re under 50. If you’re 50 or older, you can contribute $8,000. However, don’t let the lower limits discourage you. Even smaller, consistent contributions can grow over time thanks to the power of compound interest.

For example, if you invest $7,000 annually for 10 years and earn an 8% return, you could end up with over $109,000. Over 20 years, that could grow to $345,960. Over 30 years, your investment could reach over $856,000. As you can see, time is a powerful tool when it comes to saving for retirement.

3. Build a Dividend Income Portfolio

If you want to supplement your retirement income further, creating a dividend income portfolio is another option. Dividends are payments made by companies to their shareholders, usually from profits. Instead of relying on selling stocks, dividend income provides you with a steady stream of cash flow.

This income can be used to pay bills, or you can reinvest the dividends to grow your portfolio over time. This strategy is known as Dividend Reinvestment Plan (DRIP), where you automatically reinvest your dividends to buy more shares, which in turn generates even more dividends.

However, it’s important to remember that dividends aren’t guaranteed. Not all companies will continue paying dividends, so it’s crucial to choose companies with a strong track record of paying and increasing dividends. Research is key to making sure you’re building a reliable source of income for your retirement.

Conclusion

While Social Security provides some financial support during retirement, it’s not enough on its own. By taking advantage of workplace benefits like 401(k) matches, contributing to an IRA, and building a dividend income portfolio, you can ensure that your retirement savings are robust enough to support your lifestyle. The earlier you start saving, the more time your money has to grow and work for you. Even if you’re already retired, exploring part-time work, side gigs, or making your investments work harder can help boost your retirement income.