Do you think you’re financially on track to retire? If not, you’re not alone. About 55% of Americans say they’re behind on retirement savings.
But retirement is a HUGE expense! The average person spends about 20 years in retirement. That means you need enough money to last two decades.
I’m not trying to scare you – I’m just trying to emphasize the importance of investing for retirement.
Financial Strategies for Successful Retirement
If you’re worried that you’re behind on saving for retirement, I’m sharing 8 financial strategies for successful retirement.
1) Calculate how much you’ll need to retire
Before you start saving and investing for retirement, it’s good to have a tangible goal in mind.
A super easy way to figure out how much you’ll need to retire is to use a free online retirement calculator.
You’ll enter your current income, expected expenses, and you’ll see exactly how much you need to save each month to be on track.
2) Open a retirement account
I know, this one is pretty obvious, but if you haven’t done it, it’s an extremely important step.
You may already have a retirement account with your employer, and if so, fantastic. But if you have a non-traditional job, or you’re self-employed, then you may need to be proactive in opening your own retirement account, like a SEP IRA or Solo 401K.
Whether you have an employer-sponsored account or your own IRA, both are available as either a traditional or Roth option.
Basically, with a Roth account, you contribute money to the account after you pay your taxes, which means you have more flexibility on taking the money out. With a Traditional, you contribute to the account and THEN pay taxes, so it reduces your effective tax rate.
3) Make sure you’re actually investing
A lot of people make the mistake of assuming that just because they opened a retirement account that they’re investing for retirement. But that’s not true! Once you open the account, you actually have to choose your investments so that your money actually grows in those accounts.
The simplest way to get started is by choosing target date funds. These are bundles of different stocks and bonds that automatically adjust as you get closer to retirement to ensure that you’re taking on an appropriate amount of risk for your age.
4) Set up recurring automatic deposits
If you have an employer-sponsored account, then your company likely deducts your retirement contributions from your paycheck already. If they aren’t, change it so that happens!
And if you have your own IRA, set it up to automatically move money from your checking account to your IRA and invest every month. If you don’t have to think about it, you’re much more likely to do it. It will be the best move you’ve ever made!
5) Increase your savings every month
At a minimum, you should be saving 10-15% of your pretax income for retirement. But if you can’t afford that right away, that’s ok. Maybe you’re focusing on paying off high-interest rate debt or saving up an emergency fund.
Save what you can afford right now and gradually increase it as you gain financial stability.
Although, keep in mind that if you are behind on saving for retirement, then you may need to aggressively start saving to get back on track and be able to retire.
6) Max out your contributions with additional accounts
If you have an employer-sponsored retirement account like a 401(k )or a 403(b) and your company offers matching contributions, contribute as much as your employer will match. This is free money, so take full advantage of it.
If you don't already have a Roth or Traditional IRA, set one up and max out those contributions as well. If you're self-employed, open a solo 401(k) or SEP IRA and max out those contributions too. (Are you picking up on a theme here?)
Finally, if you have a high-deductible health plan, you can open an HSA and max that out too.
Basically, you want to save as much money as you can in your various tax-advantaged accounts because that money grows tax free, which is a HUGE benefit over the course of your life. It’s like a gift from the government, so take advantage!
And remember: if you're 50 or over, you're allowed to contribute a bit more than the standard maximum, so find the maximum amount you are allowed to contribute and do that!
Feeling Stressed about Retirement Savings?
If you feel like you’re behind on saving for retirement, let me just say this – it’s not too late. I know women who had no retirement savings and thousands of dollars of credit card debt and now they’re well on their way to a happy retirement by using the systems we provide in our signature program, Million Dollar Year.
The Million Dollar Year takes you through everything you need to know to live with financial peace, build wealth, and eventually enjoy a stress-free retirement. Not to mention the fact that you’re surrounded by a community of incredible women who are on the same journey you are and will shower you with encouragement and support.
Their story can be yours. Check it out!
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