We all know that we need to start saving for retirement. Unfortunately, the rigors of daily life make it hard to focus on the future – especially when more pressing issues such as debt payoff come into play. But as news reports continue to emerge highlighting the consequences people who didn’t save enough are suffering, it’s becoming clearer than ever that the time to get started is now.
Proving that no one is immune to struggling in retirement, Bloomberg recently featured a story about a former VP of Marketing for Oral-B who is now flipping burgers just to get by. This man did all the right financial things in his adulthood to ensure happy and easy golden years. But the recession had other plans and now he’s working at whatever job (or jobs) he can get to support himself and remain independent.
It’s a story that’s nearly impossible to believe – how can someone go from the top of an enviable career to struggling in retirement? The fact is that the circumstances hardly matter. Things come up in our lives that can’t be predicted – economic recessions, forced retirement, ageism in the workforce, medical issues, and more. You may think that there’s no way you’ll ever stop working or that you’ll have plenty of time for retirement. But we don’t have control over everything in our future – which is what makes retirement savings a must. Here’s how you can get started:
Figure Out How Much You’ll Need
There are statistics everywhere telling you how much you’ll need to save for retirement. Rather than offer you a one-size-fits-all solution, here are retirement calculators from AARP and Bloomberg to help you decide just what makes sense for your lifestyle. Having a percent to save in mind or a number you’re trying to reach will add tangibility to your goals.
Close the Gap
If you use a retirement calculator and find out that your take home pay won’t cover the minimum you need to save each month, then find a way to cut back on expenses or to increase your income. The beauty of compound interest means whatever you save now will grow exponentially in the coming years.
Utilize Your Company Match
If you’re working for a company that offers a 401(k) and matches your savings, make sure you’re contributing at least the maximum percentage they’ll match for you. Not to do so is literally walking away from free money.
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Make It Automatic
Given the choice between your monthly retirement savings and something you can have right now (whether it be extra money for the month, a purchase you’ve been wanting, or whatever else), you’ll probably choose what you want right now. That means the best way to ensure your retirement savings is on track is to set up automatic withdrawals straight to that account each month. That way you can set it and forget it and never miss a beat.
Saving for retirement when dealing with things like debt payoff and simply having enough leftover to put food on the table is hard – there’s no question about that. But sacrifices to make it happen now will pay off dividends later. And if you could use some more guidance on how to save for retirement, check out this blogpost which offers even more tips from around the web to help!
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