Craving for Saving: Making the Push Toward Retirement
retirement (Photo credit: 401(K) 2013)
Retirement or Unicorns? One might be more realistic than the other, but the fact remains that in today’s economy, retirement feels like a pipe dream. We work a nine to five, putting away what we can, but for many of us, it’s not enough. Everything seems to be getting more expensive (gas, groceries, even housing) and yet income doesn’t rise and other fixed costs don’t go away. We can find a lot of information out there on finding your retirement number and saving for our futures, but for many of us, it seems so far off. Now, I’m not saying that you should ignore advice or shy away from useful tools like retirement calculators. These tools help us establish a baseline and set a goal for our savings plan, but they obviously can’t account for everything.
Be your own advocate
We should all try and be the experts on our finances. All the tools and experts are only as good as the information they have and whatever level of predictability the market allows. Having survived the recession, the housing bubble (and its subsequent bursting) and countless other financial fiascos, we all know that most financial planning can be educated guesswork at best. We know where the fat exists in our budget, and the ways to trim it that will work for us.
Start planning now
It is not uncommon to reach retirement and find that you are forced to live on 80 or even 50% of what you made when you were working. For all of us, money is an unfortunate necessity. Less money means fewer amenities, and more changes in your lifestyle. Why not practice saving now so those changes don’t come as such a shock? Or, perhaps, you can even enjoy a little luxury later in life. Easier said than done right? Investments aren’t working in our favor the way they used to. Gone are the days where you could get 10% on a government bond. All that being true, what can we control when it comes to securing our financial futures?
Don’t get pinned down
Start now by cutting back on those budget staples like groceries, insurance, car servicing and all those other lovely things we all love spending money on. There are many ways to do this, and we don’t have to look very far.
The first and perhaps most useful step is to simply ask. Many companies, particularly in industries like insurance, loans, and even phone service often have discounts available that you might not be aware of. These might include a percentage off for early payment, cash payment, auto withdraw or bundling of services. In the case of Cell phone service, it can be helpful to calculate the cost of your phone over the life of the contract you are tied into.
Companies will try to lure you in with a discounted phone, but they expect to make up the cost with service charges, overages etc. over the life of the contract. Cell phones seem to be a budget staple these days so before you let that staple pin you to the ground, make sure you know what you’re getting into and take some time to evaluate your options. Generally, this is good advice for all of us to follow when evaluating any purchase decision.
Making the final push
For those of us making the final push towards retirement, it can be even tougher. Perhaps your 401k or IRA is underperforming and not giving you the financial boost you once hoped it would provide. That magical retirement number seems unattainable and you feel there’s little you can do about it. We can’t manufacture money, but what we can do is make our dollars stretch. Take advantage of discounts that come with age. Enjoy the perks of your many years of hard work and save on the practical things in life like AARP insurance, cell phone service and, of course, some much deserved entertainment. While cutting back expenses is great, there are other ways to make your money work for you.
Don’t let debt get you down
Retirement funds are not performing like they used to. Employers are no longer matching our 401ks and even saying the words “make your money” work for you seems laughable to some. Even if we can’t rely on interest to get us to that magic number, we can at least keep interest expenses from crushing us. Take some time to look at how much your credit cards and loans are costing you over time. This can be an eye opening exercise and help give us that extra push we need to start cutting back elsewhere and start paying down those balances. Those underperforming retirement accounts aren’t gaining interest, so why not use that money to pay off your auto, home and credit card balances. It may not be making your money work for you so to speak, but at least it isn’t being funneled into someone else’s pocket.
The moral of the story: Take care of your own money because others are all too happy to take it from you.
Louis Mack is a seasoned financial planner who specializes in retirement planning. When he’s not looking to the future, he enjoys sampling exotic teas and fly making.
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Category: Retirement
