5 Ways to Boost Retirement
By Lisa Lewitzke
We’ve been getting questions lately on how to boost retirement savings in today’s trying economic times. While most of our clients are comfortable financially, many Americans aren’t saving enough or aren’t even planning for the future while just trying to make it through the present. And the roller coaster stock market is not helping matters.
As I’m getting older myself and helping to understand the needs of my grandparents, who are 99 and 103, I see that I might live a lot longer than I thought. If I get to be 100, I will need a lot more retirement savings to help me live comfortably. Just as health care costs and the standard of living have gone up dramatically from when my grandparents started to save, the same will hold true for me.
With that in mind, I’ve put together a quick list of what we all can do now to help position ourselves better when that time comes to retire:
1) Change your mindset. Save as if you will reach the age of my grandparents. The days of retirement at 62 are over. People are working much longer. If you delay retirement, you will be giving your retirement benefits more time to build before you start dipping into your nest egg.
2) Put retirement first. We all have unplanned demands that come up in our lives: A car expense, something extra for the kids, a medical bill. But if we are forever going back and forth on the percentage we are saving for retirement, we will never meet our goals. Think how much more difficult those costs would be in retirement if you don’t have the funds saved and no paycheck to cover them.
3) Take advantage of your employer 401(k) match. Most employers match employee contributions, typically up to 3%-6% of earnings. That is free money, and you should be taking advantage of it. Your contributions are before taxes too. So just by the nature of the account, you are able to save more in a 401(k) plan than other retirement vehicles.
4) Give yourself a raise. Every year, try to increase your retirement savings by 1%. If you are getting an annual pay raise, use that occasion to set aside more. You haven’t become used to the extra money yet, so you won’t miss what you sock away.
5) Allocate your assets properly. Many people don’t think a great deal about what funds they are investing in through their 401(k) plans. Some just put it all in one place to make it easy. But you really should consider your risk tolerance and time horizon to make sure that you are doing the best you can for yourself. Make the most of any information or service your employer offers. Talk to your investment advisor. Also check in from time to time to make sure the funds you select are on track for meeting your goals.
When most of us think ahead to our retirement years, we aren’t thinking about sitting on our front porches in a rocking chair. We are thinking of where we will travel or how we can volunteer or what ways we can spoil our grandchildren.
Now is when we all need to be taking measures that will allow us to be able to see those dreams come true.
Lisa Lewitzke is an associate at Landaas & Company.
“Smart 401(k) Investing,” from the Financial Industry Regulatory Authority
“3 Easy Ways to Boost Your Retirement Savings,” from the Securities and Exchange Commission
initially posted July 26, 2012