Categorized | Retirement

Saving for Retirement


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Saving for retirement can seem like an almost unending and fearsome task. The idea that one day you may not be able to make money or build wealth as you once did can be as terrifying as it might be for others to realize that they may never get the chance to retire. The actions you take today are the catalysts for the ripples in your financial history that you will see tomorrow. Understanding the best ways to start saving for retirement today give you not only the best chance to be able to retire, but the best chance to have a financially successful retirement that can be more stress free.

Understanding How to Save

The key to retirement is understanding how to save and unstinting how to save comes from knowing how to budget your money. Seems simple enough, right? However recent studies released by the Bureau of Labor and Statistics as well as private studies as well have revealed that the average American is saving less than they were a decade ago. What this means is that more Americans and their families are living paycheck to paycheck and not putting as much away as has been seen with other generations. While the economy has a lot to do with this trend, so too does the way in which we were raised and trained to deal with our day to day and month to month financial dealings. The first step towards retirement is understanding how to save the money that you are working so hard to bring home. Saving has to become second nature and that is not very hard of a task to achieve. In fact by slightly changing your spending habits on a daily basis can have tremendous savings effects on your retirement funds.

For example: let’s say that you spend $10 dollars a day on a coffee and lunch. Assuming you work 5 days a week, you’re spending $50 dollars a week. When you multiply that by the average of 4 weeks, you are spending $200 dollars a month on lunch and a coffee. Now let’s say that in the place of buying lunch and a coffee, you bring lunch and a thermos of coffee with you to work. By buying these items in greater quantity at the grocery store and brewing your coffee at home, you might be able to save as much a 75% of the very cost you were spending on a weekly basis.

By curtailing your spending habits, you are more likely to see the saving add up rather quickly. One of the greatest ways to see how much money you are saving, take the difference of what you were spending and what you are spending and deposit that money into a piggy bank, envelope, or savings account. Over the course of a couple months, you will be shocked to see how much money you have saved up.

Pay Yourself Firstretirement 1

Three words were never spoken more true. Pay yourself first on everything. Every check you bring home take out a percentage and put it into a separate account regardless of what kinds of retirement funds you have in place. 401k, building some type of nest egg, pension, IRA, or ever diversifying your stock portfolio are all really great ways to save up for retirement, but all are traditional ways of putting money aside. Even if it is only $100 dollars a week, by the end of the years you will have amassed over $5000 dollars. It is important to pay yourself first because this also helps to reinforce your understanding of how to save for retirement. Just like when one is trying to lose weight, the constant action of practicing what will eventually show us results is key to the promotion of how will and ability to move forward with the task at hand. By paying yourself first, you will also become the first to see what only a slight change in behavior can do toward long term financial success and security.

Retirement should be an active life long goal. Unless you are part of the 1% or maybe even 2% of the world’s population that actually enjoys what they do for a living, you might want to consider how best to relax in your golden years. The current retired generation is finding out that while life spans have increased, the planning for financial success in the latter years of life also needed to evolve, but didn’t. Saving for retirement is easier than you think as long as you are committed to the understanding of what retirement should hold for you. In essence you can save for retirement much like you tend to spend on daily expenses, as long as your plan of action is contradictory to your long term goals!

 

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