Game the system: How you can end up with an extra $73,000 for retirement

Christy Bieber
The Motley Fool

Building up a large retirement nest egg can be a challenge, but you may be surprised at how easy it is to supercharge your savings and end up with a lot of extra money in your later years.

In fact, by making one simple move, you could end up with an extra $73,000 in retirement savings if you're currently middle-aged and you don't plan to retire until you're in your 60s. 

How to add an extra $73,000 to your retirement accounts

So, how can you add an extra $73,000 to your retirement nest egg? It's simple – increase the amount you're saving by just $1,000 annually. If you do that and earn an average annual return of 8% per year (a reasonable rate of return to expect if you invest in an S&P 500 index fund), you'll end up with around $73,105 extra in your retirement savings accounts after 25 years. 

Saving an extra $1,000 per year may seem difficult at first, but the reality is that this breaks down to just about $83.33 per month. For the cost of around two dinners out, you could make yourself $73,000 richer as a retiree. This extra $1,000 a year over 25 years adds up to much more than the $25,000 of your money that you're putting into your retirement account because of the power of compound interest. The money you invest earns returns, which are reinvested and earn their own returns. Your money works for you once you've put it into the stock market, and it helps you build the type of wealth you need to live a life free of financial worries in your later years.

Here's 2 things to do if you're in your 20s:Fund a retirement account, start investing

Johnson & Johnson, AT&T, Innovative Industrial:Dividend stocks that can generate monthly income

Of course, $73,000 isn't a fortune – and, in fact, it will produce only around an extra $2,920 in annual income as a retiree if you follow the 4% rule. But when you consider that the median 401(k) balance among households nearing retirement was just $144,000 in 2019, it's easy to see how much this extra money could help. 

And the extra $83 a month could actually turn into even more money if your employer matches your contributions. If your employer provides a 50% match on the $1,000 you invest, you could end up with $1,500 more going into your retirement account every year for the $1,000 you invest (assuming you aren't already maxing out your match). That $1,500 annual contribution over 25 years could turn into $109,658. This still isn't enough to live on, but it would provide around $4,386 in yearly income. That's a pretty big boost to your retirement funds for the price of a few meals each month. 


To amass so much from $83 monthly contributions, you will need to start when you're relatively young. You need that 25 years of compound interest for $25,000 worth of contributions to almost triple. But the good news is that the younger you are when you begin investing, the more your contributions will grow over time. If you're in your early 30s and aren't planning to retire until you're in your late 60s, your $83 a month could be even more valuable. After 35 years of $1,000 contributions, you'd have a whopping $172,316 even before taking into account any employer match. 

Of course, you may not be able to find an extra $83 per month by eliminating a few meals out. But chances are good you could come up with this much money somehow. Dropping a gym membership, switching to a cheaper cellphone, or putting in a few hours of work at a side gig could give you the money you need to make your retirement account $73,000 larger.  

The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

Offer from the Motley Fool:The $16,728 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.