Planning for your retirement comes with its fair share of concerns. With people living longer and longer, how much do you need to save so you don’t run out of money? Will the volatile markets work in your favour and help you grow your savings? How can you contribute to your retirement savings to offset these two concerns?
Not everyone has the flexibility or risk tolerance to shift to higher yielding yet more volatile investments. The safer option is trying to save more each paycheque in order to increase the amount you are saving. If you are open to putting more of your hard-earned money into savings, or if you are okay with slightly compromising your current lifestyle in order to boost your retirement, we have two approaches you should consider:
Pay Yourself First
A great way to save is taking an approach where you pay yourself first. You need to figure out the amount of money you need to save from each paycheque in order to reach your retirement savings goals. The idea behind this is for you to put your desired amount in an investment account before you spend any money on the rest of your budget. It’s an automated way to increase your retirement fund. When budgeting, you should consider this retirement savings amount as another required payment and work around it. You can consider adjusting the amount you save if other investment goals, like education savings for your children, become a new priority.
Analyze your Budget
It helps to think of budgeting in a positive sense rather than a negative. It’s not so much about restricting your lifestyle; it’s about giving you the ability to achieve long-term goals. You can analyze each of your monthly expenses and try to think of ideas as to how you can reduce or remove some costs. This will allow you to direct extra money towards your retirement savings. This could be as simple as bundling your phone, TV, and internet services or delaying the purchase of a new car for another year. You can track the money you are saving and direct it towards your retirement while watching it grow.
A financial advisor at The Beacon Group of Assante Financial Management Ltd. can help you review your current budget and savings plans, and help support and meet all of your financial objectives.