Saving for retirement can be stressful, especially if you feel you didn’t plan correctly. What does this mean, and how can you reduce your stress when saving?
Know Your Current Situation
How can you save properly when you don’t know what you already have? Knowing where you stand in terms of saving for retirement can help develop a plan that will point you in the right direction. Lay out all your savings plans, investments, and balances and see how things look. This will help paint the picture of where you want and need to go.
Think Toward the Future
It’s easy to sit and beat yourself up about not having enough saved. Things happen, and life can often get in the way but it’s never too late to start somewhere. Now that you have a pretty fair assessment of what needs to be done, it’s time to get to it. The key is in focusing on what you can do now and to move forward. Even if your funds are tight, small contributions eventually add up.
Focus on Your Progress
Once you create a plan, channel your fears into the progress you are making. Don’t pressure yourself into thinking you have to contribute large amounts every month. Again, little steps go a very long way. Being able to say you contributed something should give you a reason to smile. You’re building discipline to contribute larger amounts in the future.
Give Yourself a Yearly Goal
One of the best ways to save like you mean it is to give yourself a yearly goal. Nothing beats being able to look back at when you started the goal, and how far you’ve come. Considering a target-date fund is also a choice that could get you closer to where you want to be when you retire.
Consider Automatic Deferrals
You can’t spend what you don’t have. If you have direct deposit, see if you can divert those funds you want to save directly from your paycheck. Once it’s gone and in your fund, you can’t touch it. This is a good option for those who like to see their money, but know they will start touching it if they can.
Start Reducing Your Expenses
Take yourself on a trial run to see if you can start working on your retirement. By reducing your expenses now, the shock factor won’t be as prevalent as if you’re jumping in headfirst. Start paying off those debts. If you are planning to have a new car when you retire, start planning to pay for it in cash. If you have a home, add an extra payment or two if you can to pay off your home prior to retirement to put yourself in a better position. You’re working now to reduce any unnecessary retirement expenses you could have later.
Consider Taking Some Risk
If you’re in a position to take some risks with your portfolio, do it. You may find that you’ll have bigger gains than you realized, which will be beneficial in the long run. If you’re feeling that it’s risky, start with one option and see how it performs. This will help lay the foundation for future planning, and could help you get closer to your retirement savings goal.
Practicing before you retire can help alleviate the stresses that you may be feeling. Knowing that you aren’t alone, and everyone starts somewhere should help you get in the right mind frame. Use these tips and get started! And for more information on retirement saving and planning, feel free to contact our team, California Retirement Advisors, at cradvisors.com or call at 888-643-7472 to schedule an appointment with a licensed advisor.
By Christian Cordoba
CERTIFIED FINANCIAL PLANNER™
Founder, California Retirement Advisors
Investment advisory services offered through Mutual Advisors, LLC DBA California Retirement Advisors, a SEC registered investment adviser. Securities offered through Mutual Securities, Inc., member FINRA/SIPC. Mutual Securities, Inc. and Mutual Advisors, LLC are affiliated companies. CA Insurance license #0B09076. This content is developed from sources believed to be providing accurate information and provided by California Retirement Advisors. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. California Retirement Advisors, nor any of its members, are tax accountants or legal attorneys and do not provide tax or legal advice. For tax or legal advice, you should consult your tax or legal professional.