Millennial Money: 4 strategies for using side hustles to fund retirement savings

abcnews.go.com:

Some people may want to fast-track their savings because they have early retirement goals or want to catch up after a period of not saving as much as desired

At the start of 2022, I panicked after realizing I was in my early thirties with only about $4,000 saved for retirement. Once the panic subsided, my solution was to use side hustles to fast-track my retirement savings. Within two years, I was able to use my freelance and 9-to-5 income to grow my retirement savings by over $100,000. Here are some strategies I used to achieve my goal.

1. DRAFT A RETIREMENT PLAN

Over the years, I hadn’t put much thought into when I wanted to retire or how much I would need. I got started by reading online articles and using a retirement calculator.

Drafting a retirement plan was a cathartic process — it challenged me to think about what lifestyle I want during retirement and how much that could cost. I landed around the $2 million mark, which was initially a shock to my nervous system because I only had around $4,000 saved. I arrived at this number by inputting my ideal retirement age, life expectancy, monthly contribution, monthly budget and other variables into a retirement calculator.

The retirement calculator also helped me break down how much I needed to save monthly to reach my lofty goal.

2. CREATE AN INVESTING STRATEGY

Before hunting for freelance gigs, I wanted to make sure I had an investing strategy in place. It’s easy to spend freelance money before it hits your checking account; I would know because I’ve done it one too many times.

“As a side hustler, your go-to accounts for saving for retirement are the IRA, the Roth IRA, the SEP IRA and a solo 401(k),” says Alleson Tate, a certified financial planner and founder of Avere