Take time to boost your retirement savings
Saving for retirement can feel like an intimidating endeavor, especially as that goal inches closer. When you’re 20 to 30 years out from retirement, the distant notion of retiring one day can begin to feel more like a rapidly approaching reality.
In a Lincoln Financial Group study, 46 percent of survey respondents say that the idea of having enough retirement money excites them. At the same time, 35 percent say that saving for retirement scares them.1
1. Reassess your financial goals
Along with growing your family and your career, comes a new set of responsibilities, so you probably need to update your financial to-do list. Make sure your budget and financial plan still make sense—and that saving for retirement is prioritized appropriately. If you've checked off some goals, like paying off credit-card debt or building an emergency fund, maybe you can put more away for retirement. If you have new goals in mind, like buying a home or paying for a child’s college tuition, don't let them unnecessarily take away from your retirement goal. For example, prioritizing the needs of an adorable new baby or grandchild might be tempting, but you should keep your retirement in consideration, too. For example, your future student has other ways for financing college; nobody can get a scholarship or loan to help pay for retirement.
Whether you’re taking care of your family or looking to set aside some vacation funds, it may feel overwhelming to prioritize future savings. Having your employer automatically deduct your 401(k) contributions from your paycheck makes paying yourself first easy. And you can set up a recurring payment through your checking or savings account to do the same with an IRA.
2. Use your time advantage
Retirement may be getting closer but you still have time on your side; saving and investing now can pay off big time. By maximizing your employer-sponsored savings plan, not only do you have the power of compounding on your side, but a company match is the equivalent of free money.
Just look at the numbers:
That’s the magic of compounding at work, proving that saving a little now beats saving more later. Of course, positive returns are never guaranteed.
Another bonus of your youth: You may have the option to consider a more aggressive investing strategy since you have plenty of time to recover from any losses. A financial advisor can help you build a retirement plan that grows along with you.
3. Boost your contributions
Most people’s income peaks between the ages of 35 and 55.3 That makes these years the perfect time to increase your retirement savings. You can make it very easy to do so with your 401(k) by electing to contribute a percentage of your income rather than a set dollar amount. That way every time you get a raise, you're sure to boost your retirement savings, too. Even small changes in your weekly buying habitats could have a big impact on your savings.
As the number of people you are responsible for grows, keep your retirement goals in mind. Establishing the right plan not only helps you, but can help you achieve the retirement you hope to have with your loved ones, too. Speak with a financial advisor to learn how Lincoln can help you obtain the lifestyle you want in retirement.