I always thought saving in a 401(k) or IRA was enough for retirement, but financial planners showed me 4 other smart ways to save more (2024)

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• I always thought saving into a 401(k) or IRA was enough for retirement.
• But I asked financial planners, and they recommended four other ways to save more.
• They recommended an HSA, life insurance, getting out of debt, and keeping account fees low.

Over the past couple of years, I've become obsessed with saving for retirement. For most of my 20s, I rolled my eyes at the thought of putting money away into a 401(k) or an IRA, but when I entered my 30s, it became a priority.

I started to see adults in my family inch closer to retirement without a lot of savings or a financial plan. I wanted to make sure that I was being smart with my money now and in the future, so I opened up a SEP IRA a few years ago and have been slowly increasing how much I contribute every month.

At the start of this year, I began to wonder if there were other things I could do to save for retirement in addition to my SEP IRA contributions. That's when I reached out to a handful of financial planners for tips on how to save for retirement aside from just putting cash away into a standard retirement account.

1. Consider a Health Savings Account

I've heard a lot of my freelancer and self-employed friends talk about Health Savings Accounts, but I never knew how valuable having one could be for retirement.

Patrick King, a financial planner, said that having an HSA is a fantastic and often overlooked retirement savings tool, especially for high earners.

"It's a means of tax-deferred savings that, if left unused, could potentially turn into a sort of IRA once you're 65 and Medicare kicks in. Not to mention, you can access HSA funds along the way for their intended purpose: medical expenses," said King.

2. Work on becoming debt-free

A good tip I received that can greatly benefit your finances when you retire is to make sure you start reducing your debt years before you stop working.

"Sounds like a common-sense response, but we're amazed at how many people enter retirement with car loans or mortgages," said financial planner Craig Johlfs. "In our opinion, this comes down to intentionality. Start early, 10 to 20 years out, and make a specific plan to be debt-free by retirement. Entering retirement planning with a debt load can put a strain on your other liquid assets as you may need to take larger distributions to cover your monthly overhead."

3. Watch out for fees

Something I didn't take into consideration were the fees I could be incurring with some of my retirement accounts. Dennis J. O'Keefe, a financial planner, recommended watching out for mutual fund fees if you're putting cash into mutual funds as part of your retirement strategy.

"While index funds and ETFs are dominating the market, it shocks me how often someone owns a fund with a 1-2% management fee. That just eats returns. The difference between 9% and 10% in 25 years is life-changing," said O'Keefe.

4. Consider a life insurance strategy

An interesting thing I've learned during my own financial journey is that everything you decide to do all fits together like pieces in a puzzle. For example, I never realized how something like a life insurance policy could come into play when it comes to my retirement plan.

Financial planner Brian Carlson said that a properly structured life insurance policy can be a smart tool to utilize for your mid- to long-term planning since a policy with a cash value can provide tax advantages.

But, he cautioned, "You need to be careful when obtaining a life insurance policy for your retirement planning needs as life insurance is probably one of the most complex financial tools, so it's very important you work with an advisor you trust and who knows how to properly structure the policies so they are the most tax-efficient as possible."