How to Double Your Nest Egg

Tired of the stock market screwing up your retirement plan? Here are some other ways to get ahead.

Things You'll Need

• The willingness to adapt and try some new strategies

Instructions

1. One major step that almost anyone can take is to open their own business. Even if you only earn $5,000 a year from this business you can contribute the entire amount into a self-directed retirement plan like a self-employed 401(k) or Roth 401(k). If you're a high-income earner, such as a doctor with a private practice, you may want to consider a private defined benefit plan such as a 412(i) plan. Consult your financial planner for more information on this.

2. Of course, this is not a new idea, but scaling down your budget can also make a huge difference. If your kids are moving off to college, consider selling your house and getting something more economical. If you can get along with one car, that will lower your expenses considerably, as well. The money you save can instead be put into a retirement savings account. Selling your house can be especially helpful if the proceeds from your current home sale are enough to purchase a cheaper home outright. This then frees up cash flow that was going toward your mortgage payment.

3. Use a self-directed IRA to invest directly in real estate, alternative investments or business ventures. This type of investment can often produce large profits in a relatively short time--but know the risks and rules that come with this course of action. Your account custodian should be able to fill you in on this.

4. Finally, the simplest, yet hardest solution is to just work longer and retire later. As unpalatable as this can be for many, it will make a HUGE difference in how you live after retirement. Example: A worker makes $60,000 a year and contributes 15 percent to his retirement plan each year. If the money in his plan grows by 5 percent annually, he will have about $90,000 more in his plan than if he retired at age 62. He will also have eight fewer years in which he must draw retirement income. For all practical purposes, he has made an additional contribution of $498,000 to his retirement, when you add his additional retirement plan balance to remaining salary he earned for those eight years. Unfortunately, for many, this may be their only alternative.

Tips & Warnings

• Finding a part-time job after you retire can ease your budget as well. Explore a job related to a hobby or other cause that you are interested in.