Nearly one third of those that make New Year’s resolutions vow to tackle their finances—mainly saving more and spending less—two key factors that can help pad your retirement fund as well.
And Money magazine says if you’re going to keep one resolution, boosting retirement savings is it. It also seems to be the consensus that automating those savings is the key to keeping your resolution.
What you do not have, you do not miss. Set a savings goal for each pay period and have that money deposited directly into your retirement account–even if the amount you save is only $20 or $40 each pay period. Without even thinking about it, the funds get automatically deposited into your retirement account, building security for your retirement years.
Participate in your employer’s 401 (k) or 403(b) plan. Funds are taken out pre-tax, and if your employer matches contributions, that’s either free money for you or money you are just leaving on the table if you don’t participate.
Check your habits and your net worth. The new year has many taking stock of their current standings and can be a time to ensure financial health by setting financial goals. Make a checklist of your liabilities and assets to gain a clear picture of where you are spending and saving.
Start tracking your spending to help create a better budget. This allows you to determine how much you will actually need during retirement. Using those parameters, set calculations on how much you need to save for retirement and add that to your regular budget.
Need help with your budget—you guessed it, there’s an app for that. One of the originals in the budgeting word, Mint is still considered the gold standard. Other apps, available for Apple and Android users, repeatedly mentioned in the top five include: Wally, PocketGuard, YNAB (You Need A Budget) and Albert.
What you shouldn’t do, is panic. If you have made investments, leave it alone, despite the scary news reports of a tanking economy. The New York Times reports that a long-term investor needs to sit back and relax and basically ride out the ebbs and flows of the market. In the Upshot article, What Should You Do About a Falling Stock Market? Nothing, it is noted that timing the market it tricky and by the time you figure it out, you could have lost an opportunity.
And in a report by Vanguard, Chief Investment Officer Greg Davis explains that if you have been “invested for years in a broad, diversified mix of stocks and bonds, your portfolio likely has appreciated. And the risk of timing an investment decision poorly is generally higher than the risk of changing nothing at all in your portfolio. Remember, it’s also a decision to do nothing.”
For more retirement savings tips check out https://www.cbservices.org/retirement_resources_tools.php