Want to know what increasing your savings rate can do for you? Check out our free resource, “How Much Should You Save?”

All ideas in this article are broadly applicable and don’t require you to have a certain level of expertise or knowledge to start making money. However, it is worth noting that the most lucrative ways to make extra money may be those more specialized side hustles. For example, if you are a web developer, using your web development skills to take on your own clients or teach classes has much greater earning potential than driving for DoorDash. If you don’t have in-demand skills you can easily monetize, here are some side jobs that most people can earn good money doing.

1. Pet-sitting

Many pet owners would rather leave their pets in their own home where they are most comfortable instead of boarding them at a facility with other pets. Our cat Cleo was miserable when we boarded her and she always smelled weird when we got back from vacation. We started using Rover, which was about the same price for us, and our cats are happier and we get updates and pictures of them while we are away. If you love animals, taking care of other people’s dogs, cats, and other pets could be a great way to earn extra money. We are truly appreciative of the great pet-sitters we’ve found and you have the chance to not only earn extra money, but make lives easier for both the pets and their owners.

2. Gardening

If being outdoors is something you enjoy and you are good with plants, gardening can actually be a unique way to earn extra money. Several of my neighbors grow native plants and fruit trees and have plant sales every few months and make great money doing something they love. Gardening has so many more benefits other than earning extra money, like making your yard or neighborhood more beautiful, being outside and getting exercise, and the fulfillment of taking care of something and watching it grow and thrive. In addition to gardening, more traditional side hustles like landscaping and mowing lawns can generate extra income if you like yard work and don’t mind being outdoors.

3. Delivering food or driving for a ridesharing service

This is a side job with a lower barrier to entry as you only really need a car and a decent driving record to deliver food or drive for a ridesharing service. It is often not worth it if you don’t properly account for the mileage and wear and tear on your vehicle. However, it can be worth driving at peak times when rates are higher and users are tipping more often. If you don’t mind sharing your car with others and being on the road a lot, delivering food (or people) can be a great way to earn extra money.

4. Sell stuff online

One of the easiest ways to make extra money quickly is by selling stuff online that you no longer use. Facebook Marketplace is very easy to use and you can turn things that are just taking up space in your home into cash. Selling stuff online also has a high earning potential if you find a niche you enjoy and start sourcing goods specifically to resell online. Try to find a category with not as much competition; this is easier said than done, but something like antique postcards will be much easier to make money in than used clothing or video games. The online reselling world is very saturated, but it is still possible to make great money selling stuff on the internet.

5. Freelancing

Freelancing does require you to have some skill, but chances are you have a skill you can monetize by freelancing. What exactly can you make money doing freelancing? Almost anything. If you are a teacher, you could tutor students; if you are a skilled writer, you could write articles or copy in your spare time; if you have experience growing a brand’s social media presence, there are no shortage of companies looking to grow their brand online. No matter what you are good at, chances are you can offer your services to others and make money in the process.

Increasing your income is possible for most people, but it usually isn’t easy. You may have to commit to working more hours and spend some of your free time doing side work. Only you can decide if the extra work is worth it. If you are using the extra income for very significant and important financial goals, it very well may be. It’s not uncommon for those in the FIRE movement to work extra hours or side jobs in order to have the ability to retire early. Know your “why” before you start working extra jobs; is the additional money you earn worth the time you are giving up? Money is a limited resource for all of us, but time is the only resource that we can never get back.

Learn everything you need to know about investing, including how to start, what to invest in, and when to prioritize paying off debt, at our Money Guy investing guide.

1. Get your employer match.

If you have an employer match, contributing enough to your retirement plan to get the full match should be your first priority when it comes to investing for retirement.

What if I don’t have an employer match?

If you don’t have an employer match, skip to the next retirement savings bucket (which is contributing to your Roth IRA and HSA).

What if I don’t need to contribute to get my employer match?

Some employers make contributions to your retirement plan no matter if you contribute or not. If your employer match does not require a contribution from you, skip to the next retirement buckets, Roth IRA and HSA.

What if my employer match is very generous?

Some employers offer very generous employer matches. Some are so generous that you may not be able to fully maximize the match right now. What do you do in this situation? Will you be stuck on maximizing your employer match forever?

Employer matching contributions are so powerful that you should prioritize getting every potential dollar you can, even if that means being “stuck” trying to maximize your employer match for a little while. Being “stuck” getting your employer match should be viewed as a blessing. Go give your employer a big sloppy bear hug!

What if my employer offers a discount on company stock?

Employee stock purchase plans, or ESPPs, may include a discount on company stock of up to 15%. Does this count as part of your employer match? The short answer is yes. Even though an ESPP discount typically isn’t as lucrative as a traditional employer match, it is still free money from your employer. Take full advantage of any discount on company stock you get before moving on to other retirement accounts.

2. Maximize your Roth IRA and/or HSA

Maximizing both your Roth IRA and HSA, if you are able to contribute to both, is the next step on your retirement investing journey.

Should I contribute to my Roth IRA or HSA first?

If you have access and are able to contribute to both, you may be wondering which you should prioritize. This is an often debated question on the show, and they are both amazing retirement savings vehicles, but the HSA may have a slight edge on the Roth IRA. Both are considered tax-free accounts, since qualified distributions for both are not taxed, but only the HSA allows contributions to enter pre-tax and qualified distributions to be taken tax-free. We are of the belief that most of us will spend a generous amount on medical expenses throughout our lives, which will allow you to use the HSA without ever being taxed on that money.

It is worth noting that HSAs aren’t as flexible as Roth IRAs. You can’t take out your contributions at any time, and to qualify for all tax advantages money can only be used for qualified medical expenses. However, after age 65, HSA dollars can be distributed for any reason (but will be taxed).

What if my income is too high to contribute to a Roth IRA?

If your income is too high to contribute to a Roth IRA, should you just skip it? No! Many high-income earners are able to still contribute to Roth IRAs using what are called backdoor Roth contributions. If you are able to use this strategy to contribute to a Roth IRA, do it. Check out the linked article for details about this strategy and how to implement it.

Should I really contribute to my Roth IRA before my Roth 401(k)? Aren’t they the same thing?

Depending on the quality of your 401(k) plan, your Roth 401(k) may be very similar to your Roth IRA. However, no matter if you have a great 401(k) plan, we still give Roth IRAs the slight edge. You can choose your Roth IRA provider, which means you can get access to a wider range of investments that may be less expensive. Roth IRA contributions can be withdrawn at any time, which gives you flexibility in very tough situations (although we believe you should avoid touching Roth dollars unless absolutely necessary). 401(k) plans do have some additional legal protections that Roth IRAs do not have. This may not be relevant for some, but read up on ERISA protections if they may come into play for you.

3. Maximize your employer-sponsored plan.

Maxing out your employer retirement plan, such as a 401(k), comes next. This means contributing the maximum you are able to, but does not include strategies like mega backdoor Roth contributions (that comes next).

What if I don’t have an employer-sponsored retirement plan?

Not all employers offer retirement plans, and if your employer is one that doesn’t, you may skip to the next retirement savings bucket (taxable brokerage account). However, you may have other options. If you work for a small employer, lobbying for a retirement plan could give your employer the extra nudge they need to add one. Chances are they have been considering it already, and if they know employees are interested, that might be the extra push they need.

If your employer won’t add a workplace retirement plan, there may be other options. Any self-employment income you have can be used to open and contribute to a self-employed retirement plan such as a solo 401(k). If you don’t work a traditional W-2 job or have side income, it can be a great opportunity to start your own retirement plan.

What if I don’t have the income to max out my employer-sponsored plan?

Maximizing your employer plan takes a lot of income. The overall goal is to invest 25% of your income for retirement; if you start early, less may be required, and if you are a late bloomer, you may need to contribute more. If you are contributing what you need to contribute for retirement, you may never need to maximize your employer plan, and that’s perfectly fine! In fact, getting your employer match and maximizing your Roth IRA and HSA may put you over the 25% investing benchmark. Check out our Know Your Number course for a deep-dive into how much you should invest to meet your retirement goals.

4. Hyperaccumulate for retirement.

If you reach this stage of saving for retirement, it’s likely your employer doesn’t offer a retirement plan or you have a high income. Most folks will be able to invest what they need for retirement without ever thinking about going above and beyond, and that is totally fine. For those who do need to invest more after going through the above steps, the next place you’ll turn will be mega backdoor Roth contributions, if your employer plan offers them, or taxable brokerage contributions.

Check out this video for more information about the mega backdoor Roth and how it works. If your employer plan is compatible, you may be able to build even more tax-free retirement assets. If you are unable to use this strategy or still need to invest more for retirement, consider utilizing a taxable brokerage account.

Brokerage accounts have no contribution limits and no restrictions on when money can be withdrawn or used. They have no special tax advantages like other retirement accounts and gains are taxed at long-term or short-term capital gains rates depending on the holding period of your assets.

Knowing exactly where to invest for retirement can be challenging since there are so many different types of plans and not everyone has the ability to contribute to every type of retirement plan. I hope this guide makes it a little more clear exactly where your next retirement dollar should go.

If you are young and start investing at an inopportune time, it may leave a sour taste in your mouth. How do you get back up on the horse after a bad experience investing? Learn why Roth IRAs are so powerful and why they might be the perfect next step on your wealth building journey with our Roth IRA Guide.

Not everyone is able to invest 25% for retirement in their 20s, but by the time you are in your 30s you should be aiming to invest 25% of your gross income for retirement. Here’s exactly what investing that 25% can do for you.

If you are saving for a down payment on a house, does it make sense to put your money in a savings account or invest it? Here’s what you need to be thinking as you make that decision.

Want to know what to do with your next dollar? You need this free download: the Financial Order of Operations. It’s our nine tried-and-true steps that will help you secure your financial future.

There are so many different things you should be saving for: your 401(k), Roth IRA, rainy day fund, a house, and more. How do you balance saving when you have limited resources and where should you save first?

Learn everything you need to know about investing, including how to start, what to invest in, and when to prioritize paying off debt, at our Money Guy investing guide.

Getting your employer match comes before paying off high-interest debt in the Financial Order of Operations, but contributing to other retirement accounts comes after your high-interest debt is paid off. We believe you should also prioritize investing in your Roth IRA and HSA before maximizing your employer-sponsored account such as a 401(k).

What counts as high-interest debt?

Credit cards, payday loans, and other similar types of consumer debt count as high-interest debt. Student loans count as high-interest debt if the interest rate is greater than 6% in your 20s, 5% in your 30s, 4% in your 40s, and at any interest rate at 50 and beyond, and auto debt should be paid down using our guidelines (put 20% down, pay off in 3 years or less, and keep the payment below 8% of gross income; luxury vehicles should be paid for in cash or paid off in one year).

When should I save for retirement before paying off debt?

Getting the employer match comes before paying off debt since you are essentially getting a 50% or 100% instantaneous return on your investment. Contributing to employer-sponsored accounts with no match, Roth IRAs, HSAs, and taxable brokerage accounts comes after paying off high-interest debt, but before paying off low-interest debt like certain student loans and mortgages.

Check out the video below to learn more about when you should pay off debt or invest.

In this highlight, we discuss if you should invest 20-25% of your net income or gross income.

Tax-free 529 to Roth rollovers

This is the change that caught the most attention because it sounds new and exciting, and it could be for parents worried about oversaving in their child’s 529 plan. However, for everyone else, this change is heavily restricted and has several big-time obstacles that will keep this opportunity limited. Rollovers count towards your Roth IRA contribution limit, and the beneficiary must have earned income, so there’s no opportunity to build extra Roth IRA assets other than what you’d be able to build through normal contributions or using the backdoor Roth conversion strategy.

The lifetime transfer limit to an individual’s Roth IRA is $35,000, and the 529 plan must be open for at least 15 years to be eligible for this special rollover. Funds can only be rolled into the 529 plan beneficiary’s Roth IRA, and it isn’t clear yet if changing the beneficiary on the 529 plan will reset the 15 year clock. Contributions (and growth on contributions) made in the last five years will not be eligible for rollover. There is no income limit to roll funds from a 529 to Roth IRA, as long as you meet all the other qualifications.

For parents concerned about overfunding a 529 plan and being penalized for withdrawing contributions not used for education, this change should offer some peace of mind knowing that some or much of that excess may be able to go to your child’s Roth IRA. It isn’t some secret strategy that everyone can use to build more Roth IRA assets, and funding a 529 plan still falls into Step 8 of the Financial Order of Operations. You can start rolling assets from a 529 plan to a Roth IRA as early as 2024.

Changes to required minimum distributions (RMDs)

The biggest change to RMDs is the age you must start taking forced distributions increasing for many Americans. You can use the table below to determine your RMD age based on the current legislation.

It’s worth noting that RMD ages could change again, especially if you are further away from retirement. RMD ages increasing is great for anyone who has a significant amount of money in pre-tax accounts and the additional time maximizes long-term growth and planning opportunities. This change provides more time to convert pre-tax money to Roth going into retirement and could help keep Medicare premiums lower by keeping income down in those years that previously you would have been forced to take retirement distributions.

For those that forget to take RMDs or don’t take enough, your penalty is now reduced to 25% of the amount you didn’t take, and may be as low as 10% in some cases. It’s obviously better to take all of your RMDs and pay no penalties, but nobody’s perfect, and mistakes do happen.

In a welcome change for employer-sponsored plans, RMDs will be eliminated for employer Roth accounts including 457 plans, 401(k)s, 403(b)s, and TSPs starting in 2024. Pre-tax balances of employer plans will still be subject to RMDs. Before this change, many savers entering retirement would roll any employer-sponsored Roth dollars into Roth IRAs to avoid RMDs. This eliminates the need to roll Roth assets over to avoid RMDs, and means keeping employer-sponsored assets in your plan indefinitely becomes more viable.

Changes to catch-up contributions

The changes being implemented to catch-up contributions are a mixed bag, some great and some not so great, at least for high-income earners. To start with the good changes, IRA catch-up contributions (that you can begin in the year you turn 50) will be indexed to inflation next year instead of just a flat $1,000.

Catch-up contributions in employer-sponsored plans will be going up significantly in 2025, but only for those ages 60 to 63. Between those ages, you’ll be able to contribute the greater of $10,000 or 50% more than the standard catch-up contribution to your employer-sponsored plan. Here’s an example of how it would work, if limits were the same in 2025.

• Sandra, turning 50 in 2025, gets to contribute $22,500 to her 401(k) as elective salary deferrals and an additional $7,500 in catch-up contributions for a total of $30,000.
• Gertrude, turning 60 in 2025, gets to contribute the same $22,500; her catch up contribution is 50% greater than $7,500 or $10,000. It will be $11,250 (50% greater than the normal catch-up contribution). She can contribute a total of $33,750 to her 401(k).

They could have edited the bill and just changed it to 50% greater than the catch-up since it is highly unlikely that amount will ever be below $10,000. This part of the legislation was almost certainly written before we knew the catch-up was going up to $7,500 starting in 2023, so they probably put it in there just to cover their bases.

In not-so-great changes, at least for high-income earners ($145,000+ indexed to inflation), employer plan catch-up contributions must be Roth starting in 2024. There are some unique caveats to this rule, though, and it looks like those with over $145,000 in self-employment income instead of wages will still be able to choose to do a pre-tax catch-up contribution. There’s more gray area around switching employers; it appears that as long as you earn less than $145,000 in wages from your current employer in the previous year you can do pre-tax catch-up contributions. This means it might be possible to switch employers and earn over $145,000 total, but still do pre-tax catch-ups as long as you earned less than $145,000 from your current employer in the previous year.

To make matters more complicated, employers that don’t offer Roth options in their plans may not be able to offer catch-up contributions to any employees, if they have covered employees earning over $145,000. Here’s how that could look:

• Company X has a 401(k) plan with 50 eligible employees; 40 make under $145,000 and 10 make over $145,000. If they do not offer Roth contributions, none of their employees can make catch-up contributions. If they offer Roth and pre-tax options, those under the limit can choose either option for their catch-up contribution, but those over must do Roth.
• Company Y has a 401(k) plan with 50 eligible employees, all making under $145,000. All employees can make catch-up contributions regardless of whether or not Company Y offers a Roth option, and may choose to make pre-tax or Roth catch-up contributions.

Hopefully this won’t be much of an issue as more and more employers are offering Roth options in their plans. However, if you are one of the unlucky ones age 50+ in a plan without a Roth option, it could be worth keeping an eye on. It’s possible that you may not be able to make catch-up contributions at all starting in 2024. If you are in a plan without a Roth option, now is the time to advocate for a change. It’s usually very easy for an employer to offer Roth contributions in their plan, and if it isn’t easy, they can look for a new plan provider that makes it easy.

Changes to employer plans

Currently, employers can choose to automatically enroll employees in retirement plans when they become eligible for participation, unless the employee opts out. Starting in 2025, employers MUST automatically enroll plan participants when they become eligible (but participants can still choose to opt-out). Salary deferral upon automatic enrollment must start between 3% to 10% and increase 1% per year, to 10% to 15%. Again, employees can still opt-out of automatic enrollment, but employers must enroll employees who do not opt-out.

In a change intended to help employees prioritizing paying off student loans over getting their employer match, employers can now “match” an employee’s student loan payments by making contributions to their 401(k), starting in 2024.

Employer retirement plan contributions can also be Roth, if the employer offers the option to choose. If an employee elects to receive Roth employer contributions, they will pay the tax and contributions will be vested immediately.

Roth contributions will be allowed in SEP and SIMPLE IRAs starting this year, and SIMPLE IRA and SIMPLE 401(k) contribution limits will be going up by 10%, including catch-up contributions, starting in 2024.

Other changes

In great news for anyone with a disability now or that may become disabled in the future, anyone who becomes disabled before age 46 will be able to utilize an ABLE account starting in 2026. The current age is 26.

In great news for the insurance industry, but not-so-great news for many other folks, it is now easier to put annuities in retirement plans. An actuarial test that keeps more complex annuities out of retirement plans has been eliminated. This could be a positive for some retirees since interest rates are higher now, but we worry that some savers may end up with products in their retirement plans that are less than optimal.

QCD limits will be indexed to inflation starting this year, instead of just a flat $100,000. Unlike the RMD age, the QCD age has not gone up and is still 70.5.

Several FinTech start-ups offer paid services to help you find “lost money” in retirement accounts that have been lost or forgotten. They may no longer be needed next year, as the government is creating their own national database where you can search for any retirement accounts you may have forgotten about or left behind.

One of the more administratively complex changes is the end of the saver’s credit and beginning of the saver’s match, which doesn’t begin until 2027. Under the plan, those that qualify for the saver’s tax credit (phases out between income of $20,500 – $35,500 single and $41,000 – $71,000 married) will receive it as a government match in their retirement account instead of a tax credit. This government match must be repaid if it is withdrawn before retirement.

There are many other minor changes I wasn’t able to get to, so I encourage you to check out a summary of all changes in SECURE 2.0 if you are curious about a change I didn’t cover. We also broke down the legislation and answered questions in a recent Q&A episode. While nothing in the SECURE Act 2.0 is groundbreaking or will make or break your retirement, it is important to be aware of changes that could affect you and any planning opportunities that may be available.