If you’re like most Americans, you’re facing a struggle figuring out how to save enough for retirement. In fact, according to a survey from Go Banking Rates, 42 percent of Americans will retire “broke” or with $10,000 or less saved for retirement. The reasons range from paying down debt to living paycheck to paycheck. But just because you’re struggling to piece together the retirement puzzle, that doesn’t mean you need to launch into panic mode just yet.
Whether you’re on the verge of retirement or are planning for your future, you can put together a sound financial plan that helps organize and protect your retirement. But the first step is coming up with an actionable plan that you can start today. Here’s how to get started.
Stay realistic
According to Fidelity, you should have three times your annual salary in the bank by age 40 if you plan to retire at 67 and live a similar lifestyle. But if you feel that goal isn’t realistic, don’t let that hold you back from pushing forward to beef up your retirement savings. After all, you may be able to downsize or live in a less expensive location to offset the retirement finances you need. Meet with a financial planner and go over your income and long-term financial expectations and then set a realistic goal that you can live with. You may feel you’re coming up short, but there are ways to reach your goals with some creativity.
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Get creative
Once you figure out your retirement savings goal, it’s time to get creative. If you feel your goal is bare bones or will barely get you to the level of retirement you’re looking for, you can supplement your income with a side hustle or aggressive budgeting plan.
Start with the things you enjoy doing, and can also live without. A teacher who enjoys one-on-one time with students can offer tutoring or educational consulting. A graphic designer with a love for the outdoors can offer landscaping services to blow off steam, earn extra money and apply their creativity to a new medium. Once you figure out how to add a few hundred dollars a month to your savings goals, you can double down on your savings efforts by cutting the things you don’t need. Trim one night out a month, dump the cable bill in favor of streaming videos online, and shop around for new auto and homeowners insurance to add more to your bottom line.
Make it easy
Saving for retirement can feel complicated with so many moving pieces you don’t know how to stay organized. However, there are plenty of ways to simplify the retirement savings process with the right apps and tools.
Ask your HR department or payroll about automatically applying a portion of your income to your retirement savings and add just a few extra dollars to your goal. You likely won’t miss it, or can just skip the morning coffee once or twice to make it work. Next, get an app like Every Dollar to keep track of everything you spend to see where you can trim back even more. There are also apps like Acorns that carefully invest your spare change while guaranteeing you won’t come up short at the end of the month. Even that spare change can make a long-term impact on your savings goals.
Stay accountable
No one seems to talk about a huge issue in retirement savings: Accountability. Without built-in accountability, it’s far too easy to overspend and sneak money out of your savings earmarked for retirement for use in your daily budget. Find a financial accountability partner to help you stay on track.
A partner or spouse, friend or family member who understands you and your spending habits can help you stay focused. Set up a system to discuss any purchase over a specific amount with your financial accountability partner to talk it through. This person should feel emboldened to tell you not to make that purchase and question how it will impact your long-term financial goals.
Protect your assets
Figuring out how to save enough for retirement is just one key piece to your long-term financial health. You also need to protect your assets to ensure those finances stay safe from the start. From carefully choosing the right homeowner’s or renter’s insurance to protecting yourself from online identity theft, how you protect yourself is crucial to your long-term financial health. You should also get set-up with an online identity theft monitoring service like Lifelock to make sure you’re in control of your assets and no one is using your identity to do everything from pilfering your retirement to opening up new lines of credit.
There is no single way to save for retirement and protect your assets, but doing nothing will also result in nothing. Take a proactive approach to protecting your long-term investments and financial health as soon as possible by firming up your goals and working backward from it. After all, if you don’t take action on your own retirement savings, no one else will.
