When it comes to achieving a successful and secure retirement, there are many strategies. Asset allocation. Controlled spending. Delayed Social Security. Sometimes, however, the easiest way to take control of your retirement destiny is one that is often overlooked—simply increasing your contribution amount. 

They drive your savings
Simply put, the more money that goes into your retirement plan, the more money you can have to help your investments grow toward your future. Many contributions made to a retirement plan are made on a pre-tax basis. That means they are added to your account before taxes are taken out, thereby your current taxable income for the year is reduced by the total amount of contributions. As an added bonus, the earnings on this money grow tax-deferred toward your retirement.

They can trigger matching contributions
If your organization offers a match on your retirement plan contributions, make sure you’re contributing enough to enjoy the full benefits of this contribution. A matching contribution provides an immediate return on your contributions.  Think about this—not contributing enough to get the full match is like refusing free money. Not only is your salary deferral contribution fueling your account, your matching contribution is also helping your savings blossom.

Additional contributions can mean additional returns
The amount you contribute to your retirement plan may have a big impact on your standard of living in retirement. Seriously—increasing your plan contributions by just a few percentages now can really help your nest egg hatch. Think about this—if you save just $5 more a week and that $5 earns 6 percent annually, it could grow to almost $10,000 in 20 years. 
When that $5 is invested, compounding on your increased contribution happens automatically. Regardless of your age, the longer your money is invested, the greater the chance it has to benefit from compounding…when your earnings stay invested to generate even greater earnings over time. And don’t forget that for every 10 years you delay starting to save for your retirement, you will need to save three times as much each month to catch up.

So how do you know how much to contribute?
Take advantage of the calculators on this site and consult an investment professional to get a better estimate of exactly where you stand as far your contribution amounts. There are many factors to consider with regard to knowing how much to contribute to your retirement plan, and the tools on this site can help. Contributing enough now is one of the most important things you can do to ensure you have the future you want.

The compounding concept is hypothetical and for illustrative purposes only and is not intended to represent performance of any specific investment, which may fluctuate. No taxes are considered in the calculations; generally withdrawals are taxable at ordinary rates. It is possible to lose money by investing in securities.  

Keep in mind that application of asset allocation and diversification concepts do not ensure safety of principal and interest. You can lose money investing in securities.