Clark Griswold actually had it all figured out. Sort of. Hefigured wrong, but not in the way you think. When he assumed he'dget a Christmas bonus based on previous years, mostpeople think his mistake was to spend it on a swimming pool beforehe actually received it. Much to his chagrin, despite receiving“the gift that keeps on giving,” that jelly-of-the-month club subscription couldn'tpay for the pool.

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But Clark's real mistake wasn't buying a pool before he receivedhis Christmas bonus; it was thinking he should use his Christmasbonus to buy something. There's a better use for that money, justlike there's a better use for any cash you receive as giftsthroughout the year. But let's limit ourselves to year-endbonuses.

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Related: 5 most-hated workplace holidaypractices

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Many people plan to use year-end bonuses to pay off holidaybills when they come due in January. What if, instead, theycontributed half of that bonus to their retirement plan? What wouldthe numbers show us?

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Let's say a person earning $50,000 a year saves 10 percent ayear, between their contribution and the employer match. If savingsbegins at age 30, and the salary and retirement savings remainsteady until retirement at age 70, then, with an 8 percent annualgrowth rate, that person will have accumulated $1.46 million atretirement. That amount will replace the $50,000 annual salary byearning 3.45 percent a year.

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What if this person earns a 10 percent year-end bonus every yearand puts half of that into their retirement plan, rather thanbuying that swimming pool? Saving this extra 5 percent every yearwill generate $2.16 million upon retirement at age 70, which onlyneeds to earn 2.35 percent a year to replace the $50,000salary.

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Some companies are more generous at year end and give a bonusequal to 20 percent of the employee's salary. Putting away half ofthat each year on top of the regular retirement savings will growto $2.86 million at retirement. At that amount, a 1.75 percentgrowth will yield the $50,000 necessary to duplicate the originalsalary.

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The beauty in placing a significant portion of the annual bonusinto retirement is employees won't miss it. They've existed thewhole year on their normal earnings. This extra money is exactlythat—extra. It could be used to pay for a one-time expense like aswimming pool, or it could be put to better use that will paydividends (literally) during retirement.

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And they don't have to wait for that year-end bonus to put someextra money into a retirement savings plan. While it's easier tocontribute with extra earnings, if they haven't maxed out theircontributions, they can use gift cash (or other “found” money) as aproxy to contribute to retirement savings. To do this, increase thesalary deferral—at least temporarily—and use this new gift money asa substitute for what that now-deferred portion of their salarywould have been used for.

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Implementing this strategy will truly make a Christmas bonus a“gift that keeps on giving.”

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Christopher Carosa

Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).