10 Actions To Grow Your Savings For Retirement

10 Actions To Grow Your Savings For Retirement

It’s the 2015 tax season or as H&R Block says, “Refund Season.” Some of you already may have received your tax refund, if you’re due one. Of course, the talk of the town is, “when I get my refund, I will do X…or Y.”

 

However, I beg you to use caution and discretion this time around. Do something a little different than before.  Invest that return in yourself, versus, spending it. I want to turn your attention to a time and place that may be far off for you (or not!). It usually happens around the age of 55-70. We know it as retirement.

 

I want you to consider using a portion if not all, of your refund towards your retirement. It’s “right now” decision that has long-term benefit. Do you make a lot of those types of decisions, about your money? Without much consideration, you may think you don’t, but given a little more thought, you’ll realize that your everyday financial decisions, make a huge impact on your long-term financial health, including your retirement.

 

When it comes to your retirement, however, what do you think about? Are you scared? Are you prepared? Do you feel behind? Are you unsure of when you will be able to retire? Or, are you secure? Comfortable with what you are saving and having saved? A recent article in the NY Times, shares that the Obama Administration is pushing retirement-related legislation that basically protects us from ourselves and investment advisors. Essentially, the legislation supports automatic enrollment in employer-sponsored retirement plans, like 401(k)s. Such legislation exists because we, Americans, are known not to save as much as we need or should for retirement. African-Americans in particular, have an even more difficult time saving for retirement. The Prudential 2013-2014 African American Financial Experience study reported that almost 50% of African Americans have a workplace retirement account and that 80% who are eligible to contribute are making contributions. However, the contributions are at low levels.

 

Frankly, I am tired of reading statistics like this. I am meeting more and more women and men who are feeling unprepared and discouraged. Some are simply not socking away enough, but also aren’t properly invested to grow what they have socked away. We have to turn our attention to our long-term financial health and take it more seriously today, even though it’s on tomorrow’s to-do list. I will provide some straight-forward strategies that you can take action on to improve your prospects for a retirement lifestyle you desire.

 

1.  Allocate your tax refund towards a Roth IRA. Believe me, you’ll be happy you did.

2.  Use DinkyTown’s retirement calculator to understand what you need to save on a monthly basis to retire “comfortably.” CAUTION: This number might scare and you might even say, “I will never be able to save that amount of money per month.” Let me stop you there. First, stop feeding yourself negativity. Second, it’s just a target. Even if you can save 10% of that number, you’re working towards it. It’s about what you CAN do.

3.  Set a monthly savings goal using the target number from #2 above, as a guide. If your number was $10,000 per month, strive to save $1000 or $500 a month.

4.  Save something over nothing in your employer 401(k). Don’t miss the opportunity to save.

5.  If your employer offers a match for savings, save as much as you can to take advantage of the match! That’s free money on the table. If you found a $100 on the ground, would you walk over it? Don’t walk over your company match.

6.  Review your monthly household budget and determine how much more of your take-home pay you can contribute to your retirement and still meet your monthly obligations. DinkyTown has another great calculator to help you do this!

7.  Review how your current retirement funds are invested, if you are invested at all! This is so important. So many of us don’t understand retirement plans to begin with, so the money could be sitting in cash, not growing, or in a fund that isn’t aggressive enough.

8.  Ask for money for your birthday, anniversary and Christmas gift and put it towards your retirement! It’s noble and you’ll thank yourself later. Every little bit, matters. Imagine doing that for 5 years straight! That could be an additional $500-$1000 a year towards retirement.

9.  Setup after tax retirement savings in your household budget, as an additional expense. This way, not only are you saving for retirement via your employer sponsored plan (if you have one), but you are also saving for retirement outside of your employer. This money could be directed to that same Roth IRA I mentioned in #1. $30 bucks here, $50 bucks here, it adds up and it matters!

10.  Contribute your bonuses or other lump-sums and windfalls (or a portion) to your  after-tax retirement savings. You can’t let these opportunities of “big money” go to waste. Do right by them and save some.

 

Notice all of the strategies begin with a verb. Something for you to do. Take action. Continue to take action, and get practical straightforward strategies like these and more about other areas of your financial life, so you can build wealth, consistently. Join our community of money masters and wealth builders and take whatever you have to the next level, so you’re making progress towards your financial goals, those in the short and long-term.

Speak Your Mind

comments

Dr. Dominique' N. Reese
Dr. Dominique’ Reese, owner of Reese Financial Services and creator of Master My Money, is a personal finance expert, coach & strategist, speaker, educator, author, blogger, and consultant with 10+ years experience in the financial services industry.