How to Give Your Retirement Savings a Little Jolt
Saving for retirement is a necessity, but many of today’s consumers have found that saving enough is more difficult than they expected. You have to be motivated to save that money, and you have to be certain about your goals, too. Once you do this, there’s no end to what you might accomplish. Here, you will learn about two very important ways in which you can boost your savings over time and ensure a happy retirement.
Save as Much as You Can
It may seem a little obvious at first but saving as much as you can is one of the two best ways to improve your retirement funds. EBRI, a retirement research organization, found that nearly 43% of Americans today will not reach their retirement savings goals. This is about the same number of people who don’t have access to things like 401(k) plans and retirement pensions, and it poses a significant issue.
Many of today’s consumers think they are saving enough money, but they simply are not. The biggest culprit? Failing to account for inflation. In the US, monthly inflation rates range from 0.25% to about 0.5%, which is sizeable and significant. As of 2016, the United States ranked tenth in the world for yearly inflation, too. When you think about the amount of money you need to save, it’s important to consider inflation as you do the math. Without it, you might find yourself significantly short when retirement day comes.
Don’t Touch the Funds Until You Retire
The other way that you can save the money you need (and then some) is to avoid touching your retirement savings before you retire. Again, it may seem like a no brainer, but a surprising number of people tap into their retirement funds early – and they pay the price. Millions of people all across the country are continuing to cash out their 401(k) savings, and the penalties for doing so are severe. People are also cashing in their life insurance policies, cancelling CDs and IRAs, and otherwise failing to leave their savings alone.
Though it can be difficult to struggle financially when you know you have thousands of dollars tucked away in a retirement account, per the experts, its best to pretend like your retirement money simply does not exist. If you tap into it once, there’s a very good chance you’ll tap into it again – and again, and again. Before you know it, your retirement savings has been eaten away in withdrawals and penalties, and you are left with little to no nest egg to help facilitate your lifestyle once you retire.
If you want to truly give your savings a boost, you need to do two things. First, save as much as you can. Rather than taking a frivolous trip or buying something you don’t need, put it in your retirement savings, and consider inflation when setting goals. Second, no matter how tempted you might be, never touch your retirement accounts before you actually retire. These two things will ensure that once your retirement date comes and goes, you’ll be able to live happily ever after.