Retirement Strategies

We’ve all heard the old adage, “a journey of a thousand miles begins with a single step.” The same concept applies to saving for your retirement. It’s up to you to take that first step. If you wait until you have “enough” money to begin saving, you may never start at all. Instead, focus on the first step. Then, you can begin transforming that thousand-mile journey into smaller, more manageable goals.

In order to start saving, you must spend less than you earn. If you feel that this is easier said than done, you’re hardly alone. But, it’s time to get on top of your finances and begin saving for your future. The concepts are simple: monitor where your money actually goes and plan ways to spend it carefully. In other words—prepare a budget.

If the mere thought of a budget makes you feel deprived, think of it as a personal spending plan instead. Rather than focusing on what you should not spend, a personal spending plan can help you redirect the money you do spend.

Here comes the good part. The first rule of saving is to “pay yourself first.” Even if you start with just one dollar, with patience and persistence, you can find ways to reallocate your money over time and see your savings grow.

Somewhere along the road to retirement, it is a good idea to consult your map.” Will your ride be smooth or filled with potholes? How far off is retirement day, and do you have sufficient financial resources to last the journey? Regardless of your current location along this road, it’s important to recognize that the financial “bags” you’ve packed may only take you so far.

THE SOONER YOU BEGIN, THE BETTER

Many people in their prime earning years don’t save enough for retirement. One advantage of being relatively young when you start a retirement savings program is that you can amass a potentially larger nest egg due to your longer planning horizon. The more you accumulate before you retire, the less you may need to worry about working after you retire to maintain your desired lifestyle. For these reasons, it is important to spend time now developing a well-organized plan—or “road map”—for retirement.

DETERMINE YOUR RETIREMENT NEEDS AND RESOURCES

With people living longer than ever before, a sound retirement strategy may need to provide you with an income stream, indexed for inflation, that can last anywhere from thirty to forty years. With this in mind, compare the amount of income you receive now to the amount you will have during retirement.

Once you’ve analyzed this information, you will need to develop financial strategies to help provide you with your required income stream. What assets do you currently have? What savings plans do you have in place? As you review your retirement program, how will you fill any gap between what you have saved to date and your future retirement needs?

RECOGNIZE THAT SOCIAL SECURITY AND PENSION BENEFITS MAY NOT MEET ALL OF YOUR NEEDS

In the past, Social Security and a company pension have been significant sources of retirement income. However, the days of “living off” a pension or Social Security have passed. If you depend solely on Social Security or your pension, you may find your income is insufficient to meet your retirement needs. Developing a retirement savings program can help you account for any anticipated shortfall.

INCREASE YOUR PERSONAL SAVINGS

One single way to boost your savings is to set money aside on a regular basis. Stay disciplined, and consider adjusting your budget to save more as your financial situation changes.

YOU’RE IN THE DRIVER’S SEAT

Retirement may seem a long way down the road, especially when you have immediate and pressing family concerns. However, the younger you are when you begin taking advantage of your saving opportunities, the better off you will likely be when your retirement day dawns. Why not pause now to review your long-term strategies? When you reach retirement age, you will have hopefully navigated around any bumps on your road to retirement and secured a comfortable financial future.