Retirement is the end game that most workers dream of their entire careers. But now, with the near extinction of pension plans and the high cost of living, many Americans don’t know if they’ll ever be able to retire.Many make a modest living and have difficulty saving.
These retirement fears are real. But that doesn’t mean that they have to become reality. With these retirement saving strategies, you can be on your way to saving enough for retirement.
Create a Retirement Budget
It’s going to be nearly impossible to know how much you’re going to need to save if you don’t know how much you are going to need to spend in retirement. Track your expenses to create a retirement budget, and remember to factor in any potential big-ticket items, taxes, inflation, and rising healthcare costs. You may be shocked to learn how much you’re going to need to live on, but crunching the numbers can help you plan more effectively. Then, you can put a plan into action and start saving accordingly.
Start Saving Now
Though no one can change the past, they can change the future. It’s never too late to start saving. Ideally, you should have started saving the moment you entered the workforce, but if you haven’t, don’t let it deter you from your retirement goals. Start saving as soon as possible so you have more time to build up wealth. Don’t underestimate the power of time. The more time your money can grow in the market, the more money you’ll have to retire.
Save in the Right Order
You may think that you just can’t save for retirement right now because your children are planning to go to college or because you want to pay off your mortgage before you start putting away money for anything else. This can be detrimental to your retirement goals. Always fund your retirement before anything else. Saving in the wrong order is common, but it can have serious impacts on your retirement.
Contribute to Your Company’s Retirement Plan
Though many Americans do have access to a company retirement plan, many do not take advantage of it because they don’t want their paychecks to pay household bills and enjoy life. This is a big mistake. A company retirement plan often gives you the opportunity to earn employer retirement plan match. If your company does offer a match, then not saving is like throwing extra compensation out the window if you don’t contribute—or contribute enough—to your retirement plan to earn that match.
Auto Savings Programs
When you have trouble saving on your own, auto savings programs can be a haven. If your employer does not offer a 401(k), it doesn’t mean that you cannot save on your own. Registering for an auto savings program can help you make saving for retirement part of your routine. You set up the transaction once, and the funds are transferred from your checking or savings account to your retirement account automatically every week or month where it is invested in a mutual fund. Auto savings programs can give you peace of mind, allow you to benefit from compound growth, and help you retire by the age that you want to stop working.
Consider Part-Time Work
If you didn’t start saving early enough, or haven’t contributed enough to your retirement plan, then you may have to consider working part time once you retire. Part-time work can help you put off claiming your Social Security benefits, which will help them grow substantially every year you defer. It can also help you avoid taking money out of your retirement accounts so they can also grow in the market. Plus, part-time work can improve your quality of life once you retire, offering purpose and staving off boredom.
Many Americans fear never being able to retire. But putting these strategies into action can help you can get one step closer to being able to afford the comfortable retirement that you seek.