Being ready for retirement is a lot harder than it used to be. Companies no longer offer pensions and many are decreasing or eliminating matching contributions to 401K accounts. In addition, Social Security retirement benefits are expected to be limited and you may need to hang on longer to collect benefits. Which means it's basically up to you to fund your own retirement; you can no longer rely on Social Security to pay your bills while in retirement. To confirm that you will have a comfortable retirement, you'll need to start planning and saving now.
But for millions of people in the workforce, it's hard to save. You need every dime you have to pay the bills, get the kids through their dentist bills and dresses for school and have a bit left over at the end of the month for dinner and a movie. So how can we ever find a means to put money back for retirement under these conditions?
The key to savings is to take benefit of changes in your earnings to start a savings program. For example when you start a new job with a new salary, before you get used to that paycheck, create a direct deposit of a little amount of money into a tax deferred account such as an IRA. The money goes straight in there and you never notice it in your paycheck. The funny thing regarding how we all think is that you survive up to the level of money you are getting. So if you never see that $50 or $100 in your paycheck, you will adjust your lifestyle accordingly and suddenly you have a plan in place to save for retirement.
You can use the same principle to payments you may have automatically deducted from your account. If you are giving a car payment or you have a health club bill taken directly out of your account, when those issues come to an end, think about whether you want to see those direct withdrawals stop entirely. If you are not used to having that money in your budget, you may be able to have your bank direct deposit partial or all of that amount right into your retirement account.
Just think how wonderful it would be if you could put your car payment into retirement savings every month. You would see a very substantial amount of money grow in that account in no time. And when you start seeing the financial reports start coming in from your bank or whoever is managing your retirement funds and you see it truly start to build up, the goal of a secure retirement future for you and your spouse will begin to become a reality for you.
Another exciting way to build up that retirement account is to create a project of it. You and your spouse could accept the challenge to do some form of contract or temporary work every month or so and put all of that money into your retirement fund. Maybe he can move out with friends and cut wood and sell it around city for firewood. Maybe she could use her artistic skills to make original art works and sell them at the local crafts fair or flea market.
Saving for retirement may appear challenging now, but it's very important if you want to enjoy a comfortable retirement. Gone are the days where you could rely on your company and Social Security benefits to fund your retirement. It's up to you to make sure you have enough money to have a fun and financially secure retirement.
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