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Want to retire early and spend your golden days basking in the sun? Or maybe you’re the type of person who wants to work for a good long while. Wherever you fall on the spectrum of retirement planning, it’s essential to make sure you have the right amount saved up! And, believe it or, it’s easier than ever to start saving before you retire…
Create A Budget
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You’ve heard it again and again, but it’s true: you will spend less with a budget! Just think about this: does $625.00 seem like a lot to save each year? Well, it’s really only $12 a week – that’s just a single meal out or a couple of cups of coffee. Over your working career, that will turn into more than $20,000! Even if you know where most of your money goes, using an app like You Need A Budget, PocketGuard, or another budget app can help you find some places to save. Sometimes, you might only save a buck or two – but that adds up in the end!
Now, once you start budgeting, it’s important not to just blow your new savings on food out or gadgets you don’t need. Put it towards your retirement. In fact, if you can make saving money an automatic process, all the better!
Save Automatically
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Don’t wait to start saving until you have a “cushion” or “extra money” – there’s really no such thing. After budgeting, determine how much you can save and make it happen. Better yet? Automate the saving process. In case you didn’t know, most banks will allow you to set up an automated transfer that takes money from your checking and puts it into your savings, without any work on your part. You can easily set up an automated transfer to move a reasonable amount from your checking to your savings after payday!
Start Today
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The best piece of advice when it comes to saving for retirement? Start today! The sooner you start saving, the sooner compound interest – the ability for your savings to generate earnings itself – can start really working in your favor. “It’s never too late to get started,” says Debra Greenberg, the Director of Retirement and Personal Wealth Solutions at Bank of America. “The earlier you can get started, the better off you’ll be.”
In fact, investing a smaller amount over a longer time can actually have a greater impact on your overall savings. That’s right! So, work on your budget and start saving as soon as possible. Then, you’ll be ready for retirement, whenever it comes.
Consider Delaying Social Security
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“This is a big one,” Greenberg says. “For every year you can delay receiving a Social Security payment before you reach age 70, you can increase the amount you receive in the future.” While you can start receiving Social Security benefits at the age of 62, waiting means more benefits. For every year you wait, until the age of 70, the benefits increase. And, if you’ve been saving for a while with the tips listed above, you’ll probably be okay delaying Social Security for a few years and making the most of it!
“Recognizing the need to put money away for retirement is the first step,” Greenberg explains. Well, not you know!
