Retire Your Excuses :: Save for Retirement!

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This post is part of an editorial series, “Money Matters.

When it comes to retirement savings, there are so many rules and expert articles available online that the topic can be overwhelming to research. And every situation is unique. Plus, when you’re decades away from retirement age, it is very difficult to calculate what your monetary requirements will be that far into the future.

Money Matters 2017 logoIn the meantime, we save what we can today while still living life. Any amount of savings that you can build into your budget is better than zero. This is because the idea with retirement is compounding. Thanks to compounding, it is never too early or too late to save for retirement. Here are some items to get you started saving, or if you’re an established saver, some suggestions:

  1. Prioritize your retirement contributions to the employer accounts offering a match. This is “free” money direct to your retirement account outside of the IRS contribution limits. Maximize this if possible. Never leave money on the table.
  2. If your employer offers a 401K Roth, consider contributing to it. Unlike 401Ks, Roth contributions use after tax dollars that are allowed to grow tax free. In addition, early withdrawal penalties and taxes do not apply to the original contributions. You may even utilize both a 401k and 401K Roth.
  3. Stay-at-home moms can contribute to a Roth IRA or a traditional IRA. These are opened through a brokerage firm or financial advisor, and the accounts do not require deposits from employers. The IRS contribution limit for individuals under age 55 is $5,500 for 2017. Depending on your spouse’s retirement savings, contributing may qualify you for a tax credit. If you return to an employer offering a 401k plan at any point, you may still contribute to both as long as you are within the income limits for a Roth.
  4. Use dollar cost averaging. Meaning contribute fixed, regular sums to your account throughout the year. This strategy will balance out the high times with the low times by buying more shares when prices are down and less when prices are up. This will save you from becoming a full-time market analyst and effectively manage your account through market fluctuations.
  5. Do not be discouraged if you have to stop or decrease retirement contributions. Your financial status and goals change as life happens. Therefore, retirement contributions should be adjusted from time to time. There will be times that you can contribute more and at times less. Over the years, these differences will even out as long as you stick to it.
  6. Invest for the long haul. Compounding works best over the long term. A major target fund and/or mutual funds through a brokerage firm or employer typically are decent long term investment options because they also come diversified.
  7. Check your statements quarterly. Make sure that whomever is managing the account is doing what he or she said he or she would do. Monitor the changes in your account balance (s) and ask questions any time. Always understand what is happening to your money.
  8. Involve your spouse. Saving and planning for retirement is a team effort. It’s okay to centralize management of the finances with one spouse, however, share information with the other spouse periodically. Listen to your spouse’s concerns and ideas. You’ve got to work together from the same page to get to your end goal.
  9. Do not sacrifice your retirement for your children. If you can’t swing saving for college and retirement at the same time, choose your retirement. If your position down the road allows you to save for both, then that is great. Otherwise, there will be solutions out there once your child reaches college age. But it defeats the purpose if you become a financial burden to your kids later on. Also, see point 10.
  10. Do not count on social security. Basing your retirement strategy on social security is incredibly risky. Instead, view social security as a “bonus” or “supplement” that may be available. The outlook of social security is just not promising.
  11. Never compare yourself financially to others. Focus on and make the right decisions for your own household and you will be better off.

Lauren HollisLauren is a full-time mom to her one-year-old son and a busy wife. An MBA and former finance manager, she is passionate about business and money. She looks forward to teaching her son about being fiscally responsible and the personal freedoms that come from it. 

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