Posted on 02/14/2015 7:34:46 AM PST by Kaslin
We've heard a lot about how far behind Americans are in saving for retirement, but we don't often hear many solutions that the average family can actually afford. That's how we landed on a $300 a month figure. It's a challenging number, since few of us can find an extra $300 a month without some effort and sacrifice. But it’s doable, and it's enough to make a real difference in your nest egg by retirement.
1. Deal With Realities, and Control Your Emotions
A lot of folks are debating whether or not they'll ever be able to squeeze anything out of their budgets for retirement savings. We get it. One of the main reasons people hesitate to save for retirement is that they're focused on meeting day-to-day obligations.
Christina is a mom of five kids in Alexandria, Va. Two of her children have special needs, so she knows what it's like to be wary of "spending" money on retirement savings. "It's been hard to save for retirement, because I always feel like I need to have more money in the bank since we don't know what's coming with the kids," she said.
"But I know that if we don't save now, we won't be able to take care of ourselves in the future, let alone them, if they need it," Christina added. So she and her husband have made retirement savings their priority. They're debt-free, have an emergency fund and watch expenses like a hawk. They've also come to the tough, but correct, decision to save for their retirement instead of building up a college fund for their children.
"We feel that the best gift we can give our children is a strong work ethic, good money sense and not having to care for us when we get old," she said.
2. Refine Your Budget and Work Toward Your Goal Over Time
Making up your mind to put retirement savings at the top of your to-do list is just the first step. Now you actually have to find the money. Dave Ramsey, along with many retirement experts, recommends you invest 15 percent of your income just for retirement. That can sound like a huge chunk of cash, especially if your budget is so tight it squeaks.
When Katie quit work to stay home with her kids, her family in Mason City, Ill., had to learn to live on just one income. After such a drastic cut, they had to face the fact that they could not afford to put away 15 percent of her husband's income for retirement. But they didn't stop investing just because they couldn't reach the 15 percent goal.
"We were just doing as much as we could," Katie explained. "However, each month we were able to tweak the budget a little more — stuff like changing his W-4 and our cell phone package. Now, we can afford 15 percent for retirement, contribute to college funds and increase our fun money!"
Judy from Spring Branch, Texas, started her retirement savings plan nearly 20 years ago by contributing just three percent of her salary. Then, each year she received a bonus, she diverted most of it to her 401(k), and every time she received a raise she put a third of that into her 401(k), as well.
"It did not take long to max out my 401(k)," Judy said. "At age 51, my husband and I have two kids in college with the costs completely funded. We are at the point of severe wealth building, and our giving has increased significantly. It’s a great feeling to know that I could retire at age 60 if I choose.”
3. Let Go of Past Regrets
This is where a lot of people get stuck. They see saving for retirement as a mountain that's too large to climb after a certain point in their lives. They give up before they even begin.
If you're overwhelmed by the prospect of building a nest egg at the eleventh hour, go back to the first step and separate your realities from your emotions. One of the best ways to do that is to get all the facts. Where do you really stand now, and where could you be if you started saving with gazelle intensity?
*Used with permission from Ramsey Solutions. For more information, visit www.daveramsey.com.
I suggest that people who are approaching retirement age, save as much as possible, then right before retirement, sneak across the border into mexico- denounce your US citizenship- become a Mexican citizen, then a year later sneak back into this country ILLEGALLY for some free education free driver’s licenses, free health care, free welfare to the tune of $45,000 in some cases- free housing, and you’;ll never have to worry about being arrested or deported for anything because federal laws now protect ILLEGAL ALIENS
That’s my retirement plan
how about moving to SE asia?
I keep hearing good things...
Start with your refund check. Open up a retirement account with it, arrange with your HR dept. to to change your withholding, then deposit the increase from your paycheck into the account every payday. On top of contributing the maximum allowed to your IRA at work, especially if your employer contributes to it. You can never have too much money in your retirement years.
Start with your refund check. Open up a retirement account with it, arrange with your HR dept. to to change your withholding, then deposit the increase from your paycheck into the account every payday. On top of contributing the maximum allowed to your IRA at work, especially if your employer contributes to it. You can never have too much money in your retirement years.
Well in my estimation you have already lost money if you are getting a refund check. Better to legally change your withholding numbers and your tax plan to instead of letting the government use YOUR money for free you get a bigger paycheck and take a bit each pay period and put it in a savings plan and then invest it in something better when you get enough for a buy-in on the new investment.
Watch some other stocks rather than your own company’s. If your company tanks, you lose your job and your savings.
bmp for later
Retired after 32 years of teaching with a monthly pension of 3,200. Took early SS at 63 bringing in another 1,500.
And food stamps and a free phone and eitc and basic cable...
Would you like to buy a bunker and some tinfoil?
Good strategy to the next 10 yrs or so..but after that not so much. Better simultaneously go Galt and have a good money making business to accumulate assets for after the SHTF.
Why not, when young, buy a piece of land, and let that accrue equity over the years...as you get it, with cash, put in the septic, well, power.
If nothing else - you could always move a trailer on it to and live independent, needing little for monthly income.
And or, build a house on it or buy a house, rent it out for 25-30 years, let the renters pay the mortgage and retire with a mortgage free home that is also worth much more than you paid for it. And preferably a place where you can have a garden and some laying hens, at least.
Mortgage and food are the two biggest expenses. Retiring without the mortgage and supplying some of your food - is money in the pocket. And you aren’t trusting in banks or gov’t to mind your money.
Look to YOURSELF, not bank/gov’t schemes, for securing your retirement. Your money ALL goes to YOU and is under YOUR control.
You have until September.
I agree, but if you haven’t changed your withholding yet and have gotten a refund, then use it to open a retirement account, add to it with the extra take home you’ll have once you’ve changed your withholding.
Some of the best steps you can take in saving for retirement have nothing to do with a retirement account.
1. Your most valuable asset in retirement will be good health. If you end up in retirement in poor health then all the assets in the world may not do you any good. This is especially if you're forced into early retirement due to an employment situation, and you find yourself not yet eligible for Medicare but under the monstrous burden of ObamaCare insurance mandates. In that case, a large retirement nest egg may actually be more of a liability than an asset.
2. Another important asset that might require considerable investment outside a retirement account is your ability to earn a living even in "retirement." In this regard, laying the groundwork for a second career is critical. It could even start out as a hobby, and it might be a perfect activity for retirement because it won't really be "work" but might earn you a lot of money. Running a small business on the side while you're doing your primary job isn't for everyone, but it might be the best form of retirement savings you can have.
Do like my brother and develop a talent at stock picking, build a fat portfolio, live frugally, and drive a 12 year old Honda Civic that is so scrupulously maintained that it looks new. The youngest in my family may be the first to retire.
Saving for retirement is a good idea regardless. You don’t have to put it in an IRA or 401. You can put it somewhere much more accessible in case the kleptocrats try to seize like they did in Argentina.
Living below one’s means is usually a good thing to do. It’s also better to own assets than have debts.
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