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4 Simple Ways to Save Enough for Retirement

4 Simple Ways to Save Enough for Retirement

Odds are you’re one of the nearly 60% of Americans moderately or very worried about not having enough money for retirement. Regardless of your age, profession, income or social status, a desire for retirement savings continues to top seemingly every personal finance poll. The question is: what simple things can you do to calm your nerves and instill the confidence you need as retirement approaches?

Stop Refusing Free Money

Recent data suggests as much as 80% of companies who offer retirement plans also offer to match employee contributions, up to an average of nearly 5% of each employee’s pay. Effectively, that’s a 5% bonus every single year just for contributing enough to meet your employer’s match program. Ask your Human Resources contact if you’re eligible to participate in your company’s retirement plan. Stop refusing free money!

Max Out Traditional Retirement Plan Contributions

If you are to have any any chance of saving enough for retirement, you need to save much more than the minimum to meet your employer’s match. For most traditional workplace retirement accounts, the 2014 maximum contribution was $17,500. If you contribute most, or all, of the maximum consistently year after year, you’ll be well on your way to a robust retirement

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For self-employed workers and non-traditional retirement accounts, check with your financial advisor for annual limits to be sure you’re maxing out in compliance. You do have a financial advisor, right?!

Assuming you’re 30 years old, make $75k per year, plan to retire at age 65 and earn 6% rate of return in your 401k, the below chart shows effect on your bi-monthly paycheck and the monumental difference between just contributing to get the match versus maxing out the $17,500 allowable.

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Bankrate.com 401k Calculator

    Go to BankRate.com’s 401k Contribution Calculator to customize your own scenario.

    Tax-Advantaged Savings

    Contributing to traditional retirement accounts is fundamental, but what if your contribution limits are too low to allow adequate savings? Or what if you’re concerned about the taxes you’ll pay down the road on the traditional retirement account income?

    A healthy retirement plan should include tax-advantaged savings like a Roth IRA, if you you qualify. Tax efficient investments like municipal bonds may make sense for a conservative portion of your savings. An often-overlooked savings vehicle, perfect for tax-advantaged retirement income, is a cash value life insurance program.

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    Cash Value Life Insurance may not be a good fit for everyone but the tax-favored savings accumulation, flexibility and death benefit are attracting more and more savers, especially young professionals.

    Protect Your Savings

    If you’ve followed the nuts and bolts of saving for a healthy retirement listed above, you will be in good shape. If you’re truly a saver, protecting what you’ve worked so diligently to build should go hand in hand with your plan. Protecting your savings means a few different things:

    First, don’t take more risk than you’re comfortable taking. Unless you’re burying coffee cans filled with cash in your backyard, every retirement savings plan includes some measure of risk. Fully understand the risk in your investment program or keep asking your financial advisor more questions until you understand and are comfortable with your investment plan. A properly allocated and diversified savings plan helps guard against any major economic swings.

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    Ensure you don’t get wiped out by insuring your plan. Life insurance and long term care protection should be part of every healthy retirement plan. Owning adequate life insurance can prevent financial ruin and emotional distress for your Family during the savings years — just watch a few of the short videos at non-profit LifeHappens.org to see what I mean. U.S. Department of Health and Human Services statistics show that 70% of people turning Age 65 will need some type of Long Term Care services. Lifetime income annuities may also be a nice compliment to your retirement plan as you get closer to retirement age. These annuity programs can guarantee an income for life but still enjoy a potential market rate of return. It’s important to note the earlier you secure these important retirement protections, the cheaper they will be.

    Saving enough for retirement may seem like trapping a unicorn or finally spotting that pot of gold at the end of the rainbow. In other words, it may seem like a fantasy. While your individual retirement goals are different from your neighbors’, follow these four simple concepts diligently and you will absolutely retire with confidence. Saving enough for retirement is simple. Not easy. Simple.

    “The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term, is the indispensable prerequisite for success.” Brian Tracy, Leading Speaker, Author and Entrepreneur

    Featured photo credit: betacam via freeimages.com

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    Last Updated on June 26, 2020

    25 Easy Tips on How to Save Money Fast

    25 Easy Tips on How to Save Money Fast

    “How to save money fast?” This is the question asked by all of us not in the top 1% of rich people.

    If you are looking for ways to drastically reduce your expenses immediately, first look at what you need to spend money on every week. And I mean really need.

    You don’t really need to order in food. You don’t really need to buy expensive perfume.

    Building from that, you can work out how your regular expenses can be reduced.

    As for irregular expenses, they can also be deceptively costly in the long run. Once-off buys can also be tackled with some prudent planning and a little extra research.

    And remember: a budgeted lifestyle does not mean a bad or boring one!

    But first, understand what budget you can cut down on daily:

    • Regular expenses for the average adult (can be trimmed but not eliminated):
      • food
      • rent/mortgage
      • cell phone
      • insurance
      • socializing/entertainment
      • transportation
      • hygiene products
      • household bills
    • Irregular expenses for the average adult (can be eliminated or cut down a lot):
      • travel
      • clothing
      • medication (*depends)
      • grooming (hair, nails etc.)
      • gifts

    Now, let’s dive right into the 25 ways to save money fast:

    Save Money on Food

    1. Bring a stock of food to the office/work

    Instead of popping out for an overpriced salad and a smoothie, leave a set of basic utensils at the office as well as a stock of non-perishable goods such as tinned fruit, tuna, rice crackers and so on (try to avoid the junk food and this can turn into a pretty great diet!).

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    Stocking up means you won’t forget or say “I didn’t have the time” when you rushed out to work in the morning.

    2. Buy the store-brand version

    Many basic foods, such as bread and milk, will taste exactly the same as their branded alternatives. Go for stuff with minimal additives and preservatives. Meat in a tube is probably insanely unhealthy!

    3. Eat cheaper cuts of meat

    Learn how to tenderize and flavour cheaper meat and fish, and save on the (typically) most expensive item on your grocery bill.

    4. Have group dinners

    If 10 friends put $5 each in the kitty, it’s pretty easy to make a giant lasagne and get refreshments, as well as hang out with your favourite people.

    Save Money in Transport

    5. Get a bicycle

    Save on gas money and bus/metro fares with this underrated mode of transport.

    6. Use public transport and/or don’t get taxis

    Some places can only be reached by car. But as a good practise, check your public transport website and see if any routes pass nearby where you need to get to. Walk as much as you can.

    7. Find the cheapest gas

    Regularly check out where the cheapest gas can be bought.

    Save Money in General Shopping

    8. Shop online

    Not only will you save on the gas or transport fares from going to the shopping mall but you will also find better deals

    9. Sell your old stuff

    Get your unwanted belongings up on eBay ASAP and earn a few dollars.

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    Here’re more ideas for you: 25 Things to Sell to Make a Lot of Money

    10. Bulk buying stores

    For regular non-perishable/slow perishable purchases such as toilet paper, cat food, pasta, washing powder and so on, do an epic stocking-up trip to a co-op or equivalent (my mum used to go to a place that restaurants buy from).

    Be wary of supermarket “deals”, as some have been found to be fraudulent after working out a simple calculation.

    11. Become a flea market/car boot sale/street market guru

    You can find original gifts and develop good negotiation skills at these places.

    12. Generic brand medication

    More often than not, the generic version of paracetamol and other basics work the same as the branded version.

    13. Choose deodorant, not perfume

    It blows my mind when someone drops $70 on a bottle of spray. Stick with a nice deodorant, and not only will you smell just fine but you’ll be sweat-free as well!

    Cut Down on Household Expenses

    14. Printing

    Ink is one of the most expensive substances in the office and coloured ink is doubly so. B

    e more efficient and choose black and white, and if your printer doesn’t have a print-both-sides options, just print odd pages first, re-insert the paper and print even pages.

    Expand the margins of what you are printing as often as you can to save on paper.

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    15. Minimize SMS and phone calls

    A combination of a free chat service such as WhatsApp and a free call service such as Skype can reduce your bill to nothing (so long as you have a decent Wifi connection).

    16. Shop around for insurance

    Most people don’t spend enough time searching for the best insurance deal.

    Keep a watchful eye out for deals and new competitors in the market.

    17. Try re-negotiating your rent/mortgage

    If you have built up a good credit history or a good rapport with your landlord, then chances are a frank chat about needing to tighten your spending could result in lowering your payments. You’ve nothing to lose from trying.

    18. Don’t get a TV

    Invest in a computer/laptop and an internet-only package. You can watch more (and often better) entertainment on the web, and skip the advertisements as well.

    19. Pool your internet bill with a neighbour

    My apartment building is basically a big old house split into three apartments. There are five of us in total. We pool the internet bill, making it crazy cheap.

    Save Money in Socializing, Entertainment And Travel

    20. Have house parties

    Instead of paying for overpriced drinks, set up a series of in-house get-togethers with your friends. Everyone takes a turn, so it’s not always your house that needs cleaning.

    For sound insulation, hang heavy drapes on the walls and windows. For music, invest in a good second-hand set of speakers which you can connect to your computer. Let Spotify or Grooveshark playlists do the rest.

    21. Open festivals, meetups and events

    It never fails to surprise me how much underground stuff goes on around me for free or for very cheap. Find out who runs the blogs and websites that list all the less well-known cultural activities.

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    22. Volunteer

    If you can’t pay for a ticket, volunteer and get to be there anyway.

    23. Housesit

    There are multiple housesitting websites offering you the possibility to avoid paying hotels and skip the discomfort of crummy hostels.

    Save Money on Hygiene and Beauty

    24. DIY beauty

    French manicures, pedicures, waxing, eyebrows… pretty much all of these can be achieved at home (and done well) with some practise. There are plenty excellent blogs and YouTube tutorials to help.

    25. Fewer haircuts/volunteer at a trainee hairdresser

    If you can’t bear the risk of a trainee touching your locks, learn more ways to manipulate your hair as it grows and get haircuts sparingly. Women’s haircuts are outrageously priced in many cities.

    Bonus: Effective Money-Saving Tips for Everything

    Here’s a summary of what you can generally do to save more money:

    • Share/pool resources. Organize a neighbourhood sharing scheme, common resources for your apartment block or with your friends. Not everybody needs an individual lawnmower.
    • Buy energy-saving everything. The easiest way to lower your bills – replace those lightbulbs!
    • Buy in bulk. Be sensible about it (i.e. make sure you have space!), and drastically reduce weekly expenditure.
    • DIY. Skill up using YouTube tutorials on plumbing and many other essential services so you never have to pay for simple problems again.
    • Research a lot before making a decision. Most money-wasting is the result of poor preparation and planning. Don’t shirk this part just because you don’t like it!
    • Use your network. Your network is full of resources that can ease the pain of budgeting. Ask for help.
    • Stop and think. Do I really need it?

    Unfortunately, there are some things that require plain ol’ giving up for the time being. This can include high-cost sports such as skiing, the latest versions of some technologies, the finest brands of food/drinks, premier seats at the opera and most other indulgences.

    What is important to remember during lean times is that when you look back on your life, it will be the experiences that stand out, not the extra comforts.

    Living on a budget can teach you a lot about how much you can really get out of your paycheck. We only live one life, so make the most of every penny you earn!

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    Featured photo credit: Unsplash via unsplash.com

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