January 16, 2019

Budgeting Tips For A Realistic Retirement Savings

These budgeting tips for your retirement savings are because I believe everyone needs to not just work on their current finances, but also their future. Taking control of your finances now ensures you have a better future, but there are also some specific tasks you need to do to make sure you are making the most of your retirement savings funds. A few simple concepts can help you to easily save for not just the basics, but a great retirement with no financial worries.

Check out our best budgeting tips perfect for setting up realistic retirement savings. Plan for the future now so you don't have stress later in life!

Budgeting Tips For A Realistic Retirement Savings

Accept it is never too early to start saving. Many couples and individuals in their 20’s and 30’s feel like they are in no hurry to save for retirement. The new vehicle, fancy vacation and designer clothing are more important in the here and now, however the reality is it will take a significant amount of time to put away enough money to truly provide for yourself during retirement. That means savings should begin as soon as possible. Even a teenagers first job and first budget can include a portion of savings for the future.

Treat retirement savings like a necessity in your budget. One major thing that must be addressed is that a retirement savings is not an option. This, much like your emergency fund, should be considered a need and a must-pay in your budget. While it may be tough, that is what our various budgeting tips and money saving helps are for. To prevent further debt in the future, you must focus on saving for those rainy day expenses, and that includes being prepared for retirement and the expenses that come with no longer working full time.

Give up one splurge per month to put money toward retirement. One of the best budgeting tips we can share with you for your regular budget as well as your retirement savings is to go back and find one single want or splurge in your budget and eliminate it. Add those funds directly into your retirement savings account each month. Even a small splurge of $25-$50 can add up to a large amount over several years. In the right account or fund, this can grow exponentially and create a sizable beginning to your retirement savings.

Put bonuses, refunds and other unexpected income into your retirement savings. This is a favorite in our budgeting tips, because it is a great way to easily put money into retirement without touching your regular monthly budget. Any time you receive a bonus, a refund on a purchase, a tax refund or any unexpected income, simply put it directly into your retirement savings. The only time I would recommend to use it otherwise is to help pay down existing debt. Even in those cases, I would still recommend you put at least a percentage of the total into savings.

Don’t forget to plan for long-term health care expenses in retirement. One major issue people are finding now in their retirement savings is they are not truly prepared for the potential of major health expenses. While most retirees are covered by Medicare and supplemental insurances, those do not in fact pay for long-term nursing care in many situations. Should you need full-time medical care due to cancer, severe dementia or other chronic illnesses that could leave you unable to care for yourself, your insurances most often will not cover that expense. If you do not take out a separate long-term care insurance policy, you may be without help, or losing a large portion of your retirement fund fast. Plan for extra expenses like long-term care, as well as invest in a quality long-term care insurance policy to cover these expenses should they occur.

Understand what your savings account options are. Retirement savings accounts are varied drastically depending on your preference and need. There are 401k’s that are often offered through employers and can be matched by your own investment. There are IRA’s which are great for employers or you personally to invest in. Some choose an index fund or even to take the gamble with the stock market and basic savings accounts. Take the time to research each available option, and utilize what you believe to be the safest and best investment opportunity for your money.

  • 401K plans are savings for retirement that are sponsored by an employer as part of a benefits package.  They allow the employee to save and invest part of their paycheck before taxes to increase their potential retirement investment.  Taxes are not paid on this untl the money is withdrawn from the account.
  • An IRA is an account that is setup for retirement savings with a tax-free growth or a tax-deferred basis.  You may choose from a Traditional, Roth or Rollover IRA to best suit your individual financial and retirement needs.  These are best setup through an investment firm or financial institution with experience in all 3 types of IRA’s and extensive knowledge to help you make a decision about what is best for you.
  • An Index Fund is a mutual fund with a portfolio that tracks the market index.  They are typically a lower risk investment type with low costs and a larger chance of high rate on return.

When comes to finding the best budgeting tips for securing a retirement savings fun that will last the duration of your retirement, these tips are the best place to begin. Focus on making savings a priority in your budget, and then move forward with determining the right type of savings account for you and your individual needs.

Check out our best budgeting tips perfect for setting up realistic retirement savings. Plan for the future now so you don't have stress later in life!

Are you ready for retirement? Do you have a retirement plan? Retirement savings? Read my tips on how you can prepare and enjoy your retirement days.

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For more budgeting tips check out our posts:

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