Save Now, Retire Happy: 8 Ways to Future-Proof Your Finances

Most people dream of one day saving enough money to retire at an early enough age to truly enjoy it, but planning to save such a substantial amount can be overwhelming. Like any overwhelming task, it helps to break it down and analyze it in manageable steps. At Origin, we have plenty of experience with helping people achieve their retirement dreams. Here are some basic steps for putting yourself on the path to retirement success.

  1. Start now. One of the biggest mistakes you can make is putting off saving because you aren’t sure where to start. No matter what your first move is, it’s better than not doing anything. Whether it’s putting a small amount in savings or asking about your company’s retirement opportunities, the smallest step is better than none at all.
  2. Learn the basics about investing. Research how you can diversify your portfolio, and why you should do so. Also, consider how much time you have before you plan to retire and adjust your investment strategy accordingly. If you have a long period of time, your investments could carry more risk, but if you’re close to your retirement date, low-risk investments will ensure that you hold onto your hard-earned dollars.
  3. Set an achievable goal. Estimate what your living expenses will be per year, which could be more or less than what you spend currently. To cover the long haul, assume you’ll live to be at least 90, and, just to be safe, factor in possible future medical expenses. Just as you probably do now, you can adjust your estimated living expenses if you feel the retirement goal is too high. If you set a savings goal that’s reasonable, you’re much more likely to follow through with it. Setting an amount that’s too high might cause you to give up.
  4. Sign up for a 401(k) through your employer, if possible. Retirement plans through your job are great options because they remove the temptation to skip deposits, as they’re typically auto drafted from your paycheck. In addition, employers often match your deposit up to a certain amount. Don’t pass up the opportunity for free money!
  5. Open an Individual Retirement Account (IRA). Talk to a financial advisor about what’s right for you. An IRA is essentially a savings account with big tax breaks because it’s specifically intended for retirement. Within that account, you can maintain investments that grow with the burden of taxes each year. If you have a choice between paying taxes or avoiding them by investing in an IRA, why not avoid the taxes?
  6. Track your expenses and create a budget. The simplest way to determine how you can save more money is to know how you’re spending it. Keep a running total of how you spend your money, then determine where you can make cuts. You might think that a daily $4 latte is no big deal, until you see that you could be saving an extra $120 per month!
  7. Keep your fixed costs low. If the costs you have to pay every month (mortgage, car note, etc.) are relatively low, you’ll be in a much better position should unexpected expenses pop up. You can always adjust what you’re spending on other things, but if you lock yourself into high fixed costs, you’ll have less money available to save for retirement and for unexpected emergencies.
  8. Hands off! Once your money is saved, don’t touch it. It’s tempting to dip into savings for unexpected expenses, but avoid the temptation. Keep a separate fund for emergencies, and consider your retirement savings untouchable until you’ve retired. You’ll be thankful you did!

If you have any specific questions about how to make your retirement dreams reality, contact the Origin team. We’re always here to help.