In 2019, 64 percent of surveyed Americans were expecting to retire with less than $10,000 in their savings accounts. And if the shaky economy and the rising cost of living are anything to go by, it’s clear that saving money for retirement isn’t just a nice idea – it’s a necessity for future retirees who don’t want to spend their golden years in poverty.
How can you bulk up your retirement savings? Are there any steps you can take to build a retirement savings account that you can realistically spend the rest of your life living off of? Read on to learn how to start saving money for retirement even if you haven’t saved a dime so far.
Table of Contents
1. Have a Retirement Savings Goal
According to CNBC, by the age of 67, you should have ten times your annual salary stashed away. But even if you’re not on pace to have that much money put aside and saved, it’s important to have a general savings goal in mind as you plan for your retirement.
If you’ve paid off the house and the car by the time you’re retiring, how much do you need to make ends meet? If you or your partner have worked in government or done military service, how much pension income will you have to supplement your social security and your investments? When you sit down and hammer out a realistic plan, you can give yourself a concrete financial goal to work towards.
2. Figure Out How You’re Going to Save
Many people save for retirement with 401(k)s and ROTH IRAs, and if your contributions are being matched by your employer, you may stand to benefit from making use of these retirement savings vehicles. However, it’s important to note that many retirement plans are tax-deferred as opposed to tax-free.
However, there is an exception if you can take out a tax free retirement account. With this type of account, you don’t have to worry about paying taxes when you make a withdrawal. And for many retirees who have to count every penny once the regular paychecks stop coming in, the ability to draw money without having to pay the IRS is valuable.
3. Maximize Your Savings
With your savings vehicle and your savings goals sorted out, now it’s time to execute your retirement savings plan. For many Americans who have a lot of monthly expenses to sort out, however, this part often involves making lifestyle changes. Some common money-saving strategies can include:
- Buying groceries in bulk
- Getting a part-time weekend job
- Cutting subscriptions and general expenses
When you’re used to eating out all the time and not really watching your credit accounts, these changes may feel rather stifling. But once you’ve got a routine going, Netflix nights in and monthly meal plans become par for the course.
Saving Money for Retirement Doesn’t Have to Be Complicated
From sending family members to college to taking road trips at will, the benefits of saving money for retirement are numerous. But in practice, saving money for retirement is a task that’s often easier said than done. Armed with the advice we’ve just given you, however, a comfortable retirement may be more accessible than you might think.
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