Saving for retirement starts early, and often we can overlook important steps unknowingly. As the year draws to a close, a little better retirement savings plan now can save you big bucks in the future. Making sure you can maintain the lifestyle you have grown habitual to in your working age is a concern for many people when it comes to planning for retirement.
There’re many factors to consider, so where should you begin? To start, you can take advantage of your employer-sponsored savings plan if one is offered or fund your own IRA.
With your future cost of living unknown, it is a good idea to save as much as you can, starting now, with the goal of growing a nest egg that enables you to maintain a luxurious lifestyle when your working times are done. So how do you boost your retirement savings? Below are five retirement savings tips that will help you in boosting your retirement savings.
1. Pay yourself first
What this means is make sure you contribute to your savings plan first before you put money towards anything else! The simplest and most efficient way to do this is to set up an automatic purchase plan. You can set it up weekly, and bi-weekly, monthly etc. plans to automatically take a specified amount from your bank account and place it in your savings/investment account.
For most people, if they don’t pay themselves first they find there is nothing left at the end of each pay cheque that’s why this tip is so important!
2. Be smart about debt
Debts that accumulate interest can take a bite out of your ability to save for your retirement. Delay purchases till you can afford them even without taking on new debt. If you surely must take out a loan, repay it as soon as you can.
Use credit cards to earn travel rewards or cash, but avoid carrying a balance. With the increasing acceptance of debit cards, you may be able to skip having a conventional credit card or just keep the ones you have for emergencies.
3. Evaluate your variable expenses
Most people would be surprised to see how much money they waste on stuff! After keeping track of my expenses for six months, I decided that I needed to make some cutbacks. One thing that I noticed in my expenses was that I was spending just over $5 per day at Starbucks. That’s over $1825 per year on coffee!
I decided to start brewing my own which costs me about $8 per month for coffee beans. That’s a yearly saving of $1729. Once again at 6% for 40 years that’s over $267,583. Now wouldn’t sacrificing that fancy coffee help you retire early? Maybe you don’t spend $5 a day on coffee, but everyone has something in their budget that they could eliminate to save a little extra for their retirement.
4. Work harder or smarter
Additional income is always a welcome addition when you want to boost your retirement account. If you happen to get an increment or a large bonus; allocate a portion of the increment to your retirement saving account.
If there is no such opportunity with your current job, think about adding a gig. Consider a part-time job or consulting work, which are great ways to boost your disposable income and increase your ability to save.
5. Make small sacrifices
They do add up. Check where your spending has gone out of hand and reel it in. Every “extra” you forgot now leaves more in the bank that can then be put into retirement savings for your tomorrow. Your daybreak latter is a treat you may lament indulging in down the road. By the time you factor in a tip, you are spending $5 per day that could be saved instead. Newspaper and magazine subscriptions are other examples of luxuries you may be able to reduce or live without. The point is cents saved here and there increases over time.
Saving for an early retirement is not an easy task, and no one said it would be without hard work and sacrifice, but if you follow these few helpful tips, you can boost your retirement savings dramatically. If you want to save more for your retirement, you have to start today. Don’t wait till it is late for you. Start now!