According to the United States Department of Labor, fewer
than half of all Americans are aware of how much they’ll need for retirement.
When you consider that the average American spends as much as 20 years in
retirement, that’s pretty scary.
Obviously, that’s where you need to start- by figuring out
how much you will need to retire. Take your current living expenses and add a
little extra for inflation and possible new expenses, such as medications.
While you can come up with a fairly good “guesstimate” on your own, a
retirement planning professional can help you with calculating a more accurate
figure of how much you’d need for a comfortable retirement.
Either way, you’ll likely be surprised at the figure facing
you, and that should provide plenty of motivation for you to spring into action
and start saving. That- saving money- is really the first step toward preparing
for retirement.
Non-Stagnant Saving
If you’re smart with your money, then you’re already putting
a small percentage of your paycheck in your savings account each month. Word to
the wise- if you’re not doing that, you should start!
The key, however, is not to get stagnant with your savings.
Strive to increase the amount you save each month, even if it’s just by a
dollar or two. Also, make sure you increase your savings amount each time you
get a pay raise or come into extra money. Again, a retirement savings
professional can be a vital tool for determining how much you should be saving
and the progress you’re making toward your retirement savings goals.
Get on a Budget
The number of people who spend without a plan in mind is
staggering. If you’re just spending your money as you wish and hoping against
hope that everything evens out, then you’re not approaching spending correctly.
Work with a financial planner to develop a budget for each
month. The budget should include how much you have to spend on bills, how much
you have for “fun” purchases, and how much you are putting into savings
accounts and other “future funds.” Then, stick to that budget!
The bottom line is that you have to see the big picture.
When it comes to spending money, you can’t just approach a month as a month.
It’s more than that- it’s a period of time during which you are inadvertently
making decisions about your future. If you spend frivolously now, you’ll pay for
it later, but if you budget your money and keep the big picture in mind, you’ll
eventually reap the benefits.
Invest
While budgeting your money and making sure you put funds in
your savings account each month is a good start, it’s simply not enough. You
also need to be utilizing some type of investment strategy. Whether it’s a
401(k), a Roth IRA, or anything in between, you should be building some type of
investment portfolio.
For best results, work with your financial advisor to find
investment options that have low fees, taxes, and penalties. After all, you
want your investments to work for, not against you.
If you can follow these basic tips, then there’s no reason
you can’t enjoy a happy, comfortable retirement.
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