Are You Financially Ready For Retirement?

I plan to dedicate Fridays on this blog to money…we’ll call it Finance Friday. Today I want to talk about retirement – and how financially prepared are you for that? I know that I’m still not prepared – but I’m better than I was.

I just read an article citing a report from the Federal Reserve Bank that states that more than half of Americans (56%) older than 30 years, have nothing AT ALL saved for retirement. Of those workers with no savings, around 1 in 10 is over the age of 60. I have to admit that I was shocked at the information. Don’t get me wrong – at 40 years old I had ZERO dollars saved for retirement. At 50 years old, I still had the same exact amount saved. I was shocked because I thought I was the ONLY one who wasn’t saving and I felt like such a loser!

I really get how this happens…you start out and you just need so much – a new place, new clothes for work, furniture. You go to work and have to buy lunch every day. You want to hang out with friends and the next thing you know, it’s Wednesday and you’re borrowing coffee money until payday…how the heck are you supposed to save when you don’t even have enough to get through the week?

Then you get married and/or kids start coming along – maybe there’s a house payment in there, too. Money goes out so fast that if you really don’t make a conscious effort – you won’t have anything for retirement.

So, hopefully the good news here is that you are not alone. Just knowing that made me feel so much better. It’s also NEVER too late to start saving. If you even save $1, at least it’s a start…but let’s see if we can figure out some more ways to save.

Here are my top 8 tips for saving money are:

1. My number 1 tip is to START.

2. Pay yourself FIRST! Whatever amount you are going to save – take it right off the top. Before you spend 1 penny of your paycheck – put SOMETHING aside for retirement.

3. Make it automatic – if you can have your savings deducted from your paycheck before you even see it, you have a better chance of saving.

4. Don’t leave free money on the table. If your employer offers a 401k with a matching contribution, you should sign up IMMEDIATELY. These contributions, with compounding, can effectively DOUBLE your saving effort. Why would you NOT take advantage of this? If it is possible to put in the max, do it…

5. Increase when possible – so it’s not always possible to go from saving $0 to 10% overnight – I get it. When I finally started saving for retirement at age 55, I started at 3% when I started a new job. My company match didn’t kick in until I was there a year, so I started small. When my first salary review came around, I increased my savings to 6% so I would receive the company match. The salary increased hit at the same time – so I still got more money in my paycheck and more money went to savings. I increased my savings every year with at least half of what my salary increase was.

6. Keep working! While you can technically collect Social Security beginning at age 62, the longer you wait, the more you collect. I believe the latest numbers I read is that your payment will increase by 8% each year – until you reach the maximum at age 70. If you can stick it out to 70 – you’ll have that much more money in your pocket.

7. Keep asking for raises! Your Social Security payment is based on your 35 highest paid years of salary – the more you make while working, the more you will receive when you retire.

8. Start a side hustle. I’m not talking about getting a second job here – although, if that’s an option for you and you are willing to do it – go for it…it will add to your income as mentioned in #7 above. What I’m talking about here is something that you can start now – a business or hobby that you can take your time with and build it into something that will pay you when you retire…there are so many things to do out there…I think I will dedicate another post to just that topic, but it’s definitely something to think about – also for the fact that if you have a business, you may also be able to claim tax deductions on that business…thereby giving your more money to save…

I hope this is enough to get you thinking about how you will fund your retirement. Next week, we’ll continue this discussion and cover ways that you may be able to reduce expenses now and into retirement.

Until next time – go open that savings account and…

Go Happy Yourself!!

#gohappyyourself

#financefriday

**Photo credit to onepercentfinance.com