December 29, 2015 3:18 am
“Many consumers underestimate how much savings is needed to get by once they retire, and often it’s much more than they first realize,” says Steve Trumble, president and CEO of American Consumer Credit Counseling. “After paying off debt and bills, it can be a real challenge to make sure you are also saving enough for retirement, especially if you are already living paycheck to paycheck.”
To adequately save for retirement, it’s important to assess your goals, says Trumble. What age do you plan to retire? Where would you like to retire? Will you downsize or stay in your current home? These and other questions must be considered before moving forward with a savings plan.
Once those goals have been set, craft a realistic saving strategy. These tips can help:
• Adjust your budget as life priorities change. A household budgeting worksheet can help you stay organized and track your expenses.
• Start saving now. Savings add up no matter how big or small. Make sure to start saving as much as you are able to, as early as possible.
• Pay off all debt. Carrying debt into retirement will cause monthly bills—and interest—to pile up, which will drain your savings. Develop a plan that enables you to pay off debt before you retire so that you can use savings on other necessities, such as food, medical care and housing.
• Track your spending. Knowing exactly where your money goes every month will allow you to set some funds aside for your future goals, such as retirement.
• Cut unnecessary spending. Reduce spending money on things you do not need without feeling deprived. Start with something simple, like bringing your lunch to work rather than eating out every day.
• Check your retirement plan at your work place. Some 401(k) plans include benefits, such as direct deposit from your paycheck, which can automate the retirement saving process.
• Set up automatic transfers from your checking to your savings account. With each paycheck you receive, make sure a percentage goes into your savings account dedicated to your retirement funds.
Source: American Consumer Credit Counseling
Published with permission from RISMedia.