With a new year, many of us have our sights set on bettering our lives. For some, this includes losing weight and eating healthy while for others, it’s all about getting our finances in order. For those looking to take control of your finances, there are a few simple things you can do in 15 minutes time that will have a dramatic impact on your retirement. Not only will they take little of your valuable time, you also won’t really notice an impact either on your daily life. Can it get any better than that? Here are the 2 tips you can use now to start taking control of your retirement.

Look At Your 401k Plan

The easiest thing to do is to call or email your human resources department and ask how you go about changing the amount you contribute to your 401k plan. All you need to do is change the amount you are putting away by 1%. Yes, just 1%. The great thing about 1% is that when you get your paycheck, you won’t even notice that it is smaller. For example, if you are making $40,000 per year and you have been saving 5% of your pay, increasing it to 6% means an additional $400 per year. If you get paid every two weeks (26 paychecks per year), you are looking at $15 per paycheck.

The great thing though is that you won’t be out $15. Because your contributions are taken before income tax, the hit to your paycheck will be closer to $12. Can you live without $12 each paycheck? I think the answer is yes.

Now, you may be wondering what impact a simple $15 will have on your retirement. Assuming you earn 7% on the extra $15 from each paycheck and it grows for another 25 years, you are looking at having an additional $27,000! That is some serious money! Imagine if you made it a point to increase your contribution amount 1% each year….

If you haven’t contributed to your 401k plan, now is the best time to start. Not because the market is going higher, but because the sooner you start, the sooner compound interest can work for you. If you aren’t familiar with compound interest, it’s the magic that turns your $15 into $27,000 in the future. Start saving in your 401k now and save at least enough to get the company match, assuming your company offers a match.

Fund An IRA

When it comes to an IRA, you can choose between a traditional and a Roth. I am not going to go into detail here about the differences; rather I am here to tell you that you need to start saving in one as well in a 401k plan. Doing this is almost as easy as increasing your 401k contribution from above.

All you need to do is open an account with a mutual fund company and start an automatic transfer every month. While many people rave about Vanguard and their low fees (I love them too), they do have a minimum investment of $3,000. Because of this, I suggest you look at Charles Schwab. There you can invest in Schwab funds for as little as $100 to start and then all you need is $1 to invest more. That’s not a typo, one dollar is all you need.

If you pick some of their index funds, the management fee is comparable to Vanguard. The best part is that you can open the account up online and in just a few minutes, you will be saving money towards retirement. Even if you can only afford $25 a month, it is better than nothing.

Final Thoughts

At the end of the day, you are looking at putting an extra $55 per month into retirement accounts ($30 into your 401k from 2 paychecks and $25 into an IRA account). We already know the additional money into the 401k plan grows to over $27,000. What about the IRA? Over 25 years at 7% grows to over $41,000!

So ask yourself, is saving an extra $55 per month worth it? Considering it grows to close to $70,000 I would say yes. The extra money could help you retire on time, or take an extra trip. Or it could mean you help your grandkids with college expenses. At the end of the day, I don’t know of anyone that complains about having extra money. Take the time now to make these changes and you will be happy with the results.