Many people dream about the day they can finally hang their hat and leave the working world once and for all. Maybe you drag your feet shuffling into a dimly lit office, or you mumble a few choice words about your boss beneath your breath, wishing you could say goodbye to all those frustrations and hello to worldly travels, family vacations, and endless games on the golf course. But no matter how vividly you picture post-career life, none of it will matter unless you start saving money for retirement… and you need to start now.
A growing number of Americans find themselves lacking the means to finance a retirement that can easily last 20 years or more. Why? Because Social Security benefits only provide a limited income that will seldom support the lavish lifestyle you’ve grown accustomed to—especially if your retirement account is thin and your personal savings run dry.
Retirement probably feels like a lifetime away. Maybe you think there’s plenty of time to build a nest egg that can support sailing off into your sunset years, but the longer you wait, the more you miss out on the magic of compounding interest. That’s why you should make your money work harder, faster, so the sooner, the better.
Here’s the thing: you don’t need to nickel and dime every transaction in order to set aside funds for retirement. Saving money isn’t that hard.
We’re here to show you three ways you can start saving and investing while maintaining that Hollywood lifestyle—otherwise, you might need a California reverse mortgage to afford the fine quality of life you’ve learned to love.
Enroll in Your Employer’s Plan
The easiest way to save for retirement without feeling an impact on your cash flow is by enrolling in your employer’s retirement plan. This allows you to automatically contribute a percentage of your paycheck every week or month into a 401(k) account filled with securities according to your level of risk assessment. Typically, the younger you start investing, the more risk you can take on for higher rewards because if your portfolio takes a hit, you can make it back in the years that come.
Many employers offer matched contributions up to a certain percentage, usually around 5%. Be sure to take advantage of this free money and contribute that full amount or more. If you don’t have access to a retirement plan at work, then look into opening a Traditional or Roth IRA independently.
Automate Your Savings Contributions
Whether you’re contributing to a 401(k), IRA, or personal savings account, automation is always key. It takes the mental work out of saving and helps you slowly set aside a pile of cash without noticing what’s missing.
There are mobile apps you can use to set up automatic deposits by linking your credit and debit card then setting “rules” for savings. For example, Acorns allows you to round up every transaction to the nearest whole dollar and invest spare change into stocks of your choice. You can also set up automated savings every time you spend money on a “guilty pleasure” like Starbucks coffee.
Whether it’s 10% of any deposit over $1,000, or $50 every Sunday night, setting up these types of rules for events that trigger automatic deposits into a separate account is a highly effective strategy for saving toward any goal including retirement.
See Where You Can Cut Costs
When we talk about cutting costs, we’re not suggesting that you need to start clipping coupons and slamming the brakes on all your spending. You don’t need to overhaul your lifestyle that dramatically; there are easy ways to spend less while maintaining the quality of life you enjoy.
For example, you can ask your local cable company if they’re running any promotions the next time you go to renew your contract. Or, maybe you can save money on dental costs so that you don’t have to spend so much out-of-pocket each time you visit the dentist. Wherever you spend a little less, reallocate those dollars into an investment account for retirement.
You can also train your brain to pull out your wallet less with money-saving mind hacks. For example, stick to shopping lists any time you visit a store like Target or start pricing items in terms of how long it’ll take to make that money back. With a bit of practice, you’ll be able to effortlessly save for the future and set yourself up for financial success.