Saving for retirement is more than just putting money aside — it’s about building a system that multiplies your efforts over time. The earlier you start and the smarter you allocate, the more powerful your money becomes through the force of compound growth. Phase 3 is where your retirement plan shifts from planning to building.

1. Max Out Retirement Accounts

Take full advantage of tax-advantaged accounts. If your employer offers a 401(k) match, contribute enough to get the full match — it’s free money. Beyond that, consider contributing up to the yearly maximum.

• 401(k) or 403(b): $23,000 annual contribution limit in 2025 (plus $7,500 catch-up if 50+).
• Roth IRA: Contributions grow tax-free; income limits apply.
• HSA (Health Savings Account): Triple tax advantage if paired with a high-deductible health plan.

2. Diversify Your Portfolio

Diversification protects you from risk while still allowing growth. Instead of trying to pick individual winners, consider broad, low-cost index funds and ETFs that track the overall stock and bond markets.

Example mix: 60% stocks, 30% bonds, 10% alternatives — adjusted based on your risk tolerance and time horizon.

3. Delay Social Security (If Possible)

For each year you delay claiming Social Security past your full retirement age, your benefit increases up to age 70. If you have other income sources, waiting can significantly increase lifetime benefits.

4. Explore Other Income Streams

Financial freedom isn’t just about one account. Consider creating additional income streams that continue into retirement:

• Real estate: Rental properties or REITs can generate monthly cash flow.
• Dividend stocks: Companies that pay dividends can supplement retirement income.
• Side business or consulting: Work on your own terms while adding financial cushion.

5. Automate & Increase Contributions

Set your retirement savings on autopilot by automating contributions. Each year, increase your contribution percentage by 1–2%. Small increases compound into significant long-term growth without feeling overwhelming in the moment.

Takeaway

Phase 3 is about building your wealth engine. By maximizing tax-advantaged accounts, diversifying your portfolio, and exploring additional income streams, you give your future self the resources to live retirement on your own terms. Consistency and automation make the process nearly effortless over time.