A few Tips for Retirement Saving

It's a fact that people are now living longer. Thirty years ago, the average individual's retirement may have lasted only about ten or fifteen years. Nowadays, thankfully, people regularly live for twenty to forty years past their retirement party – depending, of course, upon when they were able to hang up their work boots. To prepare for that eventuality, you need to make sure that your finances are sufficient to carry you the distance.

Saving money really doesn't have to be hard. In fact, the most difficult part is letting go of the money in the first place. We all want to save, but we're often torn between going to that great sale this weekend and planning for a future that's many years away. So, let's take a look at a few simple steps that should make it easy enough for anyone to save the money they'll need for a secure and comfortable retirement:

Think about your retirement goals. What do you want to do after you retire? If you want to travel, chances are that travel costs will have risen significantly by the time you're actually ready to get on that cruise ship. If you want to own a beach house or spend half the year in a warmer climate, you will need to have the money available to free you up to do just that. Setting a goal gives you and your financial planner a place to start.

Contribute all that you can to your employer's retirement plan. If you are closer to retirement age than some of your co-workers, you will likely want to contribute more of your income to the plan. You should at least contribute up to the maximum percentage that the company is willing to match. A good way to save more is to increase your plan contribution whenever you get a raise. Instead of using the extra money for other things, add one- or two percent more to the amount deducted from your check for your retirement account.

Consider your spouse's retirement plan. As partners, both of your retirement plans will feed into the amount of money you'll have to live on after you stop working. Be sure that your spouse is following the same guidelines so that you both are getting the most out of your plans.

Look at the diversification options. While a savings account-type of option for your 401(k) is safe and will (hopefully) earn you around 3.5% in return, a more diversified picture with a mix of high-, moderate- and low risk stocks or mutual funds will make the most of your money. Always keep in mind what they say about putting all of your eggs in one basket.

Carefully examine at your Social Security Statement. You should receive a Personal Earnings and Benefit Estimate Statement each year from the Social Security Administration. It will tell you what your benefits should be based on your earnings-to-date and the amount of Social Security taxes that you've paid. If the figures don't seem right to you, contact them immediately.

blog comments powered by Disqus