Boost Your Nest Egg: Strategies to Reach Your 403(b) Goals

We’re only a month into 2025.   If you’re still looking to make a new year’s resolution, it’s not too late to set one. How about a goal to boost your 403(b) retirement nest egg?  If that sounds overwhelming or you feel lost and don’t even know where to start, here are seven ways you can immediately boost your 403(b) nest egg and jump start your retirement savings!

• Start early – start today. It is commonly thought that Albert Einstein once declared, “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”  The quote highlights the power of compound interest over time.  It means that investment growth, or interest, that builds on itself has a multiplying effect over time.  So, the earlier you begin saving in your 403b, the greater chance you give yourself to snowball that growth and magnify your returns.  Retirement savings is not something you start as you approach retirement – it’s something you begin as soon as you can – the earlier the better and the younger the better.  Bottom line, the more time you give yourself to earn that compounding effect the better.  So, if you haven’t started yet, start right away.  
  
  
• Maximize your elective contributions to your 403b. You can contribute to your nest egg by choosing to regularly (and automatically) deduct a designated amount from your paycheck and invest in your employer-sponsored 403(b) retirement savings plan.  Such elective contribution is a systematic, disciplined, and productive way to set money aside for retirement because it forces you to save tax efficiently.  MMBB’s elective contribution 403(b) plan is called “Member Contribution Plan” and happens to be a very popular vehicle for our members to have “skin in the game” when saving for their retirement.  You should try to maximize these elective contributions as much as you can, assuming your household cash flow allows it.  In 2025, the default maximum elective contribution is $23,500.  For those age 50 and over (except age 60-63), an additional catch-up contribution of up to $7,500 is allowed, while for those age 60 to 63 the catch-up contribution maximum is even higher at $11,250.  Note, the catch-up contributions are available on top of the basic default maximum.
  
  
• Get your employer to contribute. In addition to having your own skin in the game via elective contributions, you can also get your employers to play a direct and impactful role in your retirement savings goal. Generally, many employers provide “matching” contributions, up to a limit, to their employee’s workplace retirement plan.  When available, employees should consider such employer contributions as “free money” and do everything possible to take advantage of the opportunity.  Within MMBB’s 403(b) retirement savings lineup, the “Comprehensive Plan” and “Retirement Only Plan” allow the employer to go even a step further in boosting the employee’s 403(b) nest egg.  Both plans allow the employer to provide “non-elective” retirement contribution plans into the employee’s 403(b) nest egg.  In these non-elective contributions, the employer contributes towards the employee’s retirement plan regardless of whether the employee adds to the plan or not – meaning even if you, yourself, don’t contribute to your own 403b(b) nest egg, your employer will.  Note, these plans are not mandatory for the employer to provide.  But if your employer currently is not participating in these non-elective plans, it might be worthwhile to discuss them with your employer.

• Avoid loans and early distributions. Loans and early withdrawals from 403(b) plans should be avoided at all costs. If you are indeed considering a loan or early withdrawal before age 59 and ½, it should be your last resort.  For one thing, loans from 403(b) plans will cost you dearly in terms of lost opportunity as that money will no longer be working for you and you will lose out on potential compound growth.  Additionally, you’ll have to pay the loan back with interest.  Furthermore, if you take out a loan from a pre-tax retirement plan, your loan payments will cost you more than the money you withdrew, since the payment will have to be made with after-tax money while the funds you withdrew was before-tax money;  so, for every dollar of loan balance you pay back, you will have to work harder to repay that money than you did to save it in the first place.  As for early distributions before age 59 and ½, that’ll cost you in penalty (10%) and taxes; again, that money you withdraw will lose out on potential compound growth since your money would no longer be working for you inside the nest egg.
  
  
• Invest wisely. Once you have put away the money into the 403(b), make sure you are investing wisely.  What does this mean?  It means choosing the right investment allocation with the right fund mix, so that the investment strategy aligns with your personal profile and goals.  As you are selecting the right funds, it also means watching your fund fees and making sure they make sense.  Finally, investing wisely also means periodically rebalancing your investment allocation to ensure that your evolving investment allocation remains consistently aligned with your goals through time.
     
• Work longer. Choosing to work longer can help your nest egg in many ways.  First, it gives you the opportunity to keep contributing to the retirement plan longer.  Second, working longer extends the time horizon for your money to generate compound growth, which can provide you with an even larger nest egg at retirement.  Finally, working longer defers your retirement date, allowing you to avoid tapping your nest egg early.
      
• Work with a financial planner. Working with a trusted financial planner can make a powerful difference in your retirement plan. Specifically, a trusted financial planner can provide mentorship in all the strategies we discussed above.  For example, a financial planner can help you select the right asset allocation, evaluate the pros and cons of various investment fund choices, and help you rebalance from time to time.  In addition, they can provide behavioral coaching so that you make the right decisions and avoid pitfalls along the way.  And at MMBB, our financial planner can help our members better understand the many 403(b) options and help you determine the right path to boosting your retirement nest egg.  So, if you’re an MMBB member make sure to partner with one of our financial planners! 

Attempting to reach your retirement destination without the right road map is like hiking through a forest to reach a mountain top at random with no compass or GPS software.  Instead of aimlessly wandering through the thicket, utilize a roadmap like the savings strategies outlined above to help put you on the right track for meeting your goal.