It’s easy to set up a 401(k) or IRA. Yet, more than half of Americans say they are not where they should be in their retirement savings. (Bankrate 2019 financial security survey) And 38% of the people surveyed said they don’t have a retirement savings account at all. How can you stay committed to your retirement savings?
Present Moment Priorities
You’ve got lots of present-day, pressing financial priorities:
- Students loans
- Credit card debt
- Bills to pay
- Other debt
So, thinking about retirement, especially if that appears to be a long way in the future, is just not on the front burner.
But it needs to be.
Because retirement is not a number.
Retirement is the ability to shift out of the 9-5 matrix and do what you want to do in life. It can come at age 30, 40, 60…the point is that you should decide.
And the only way to get there is to be serious about planning and saving for your retirement.
Imagine Your Future
Imagining yourself in retirement is one way to stay committed to your retirement savings.
Visualizing your retirement doesn’t mean picturing yourself rocking on the front porch. But research shows that if you can imagine your older self doing all the stuff you want to be doing, you will be more committed to saving.
So, for instance, your mental images might be:
- owning your home
- launching a business
- learning new skills such as art, music or sports
- traveling the globe
- becoming a volunteer in your community or abroad…
the list is limited only by your ability to dream.
Therefore, the first step to stay committed to your retirement savings is to keep that mental picture in your mind’s eye throughout your days. Take time every day to bring this vision of your future self into focus. Think about how you want to look, feel, think, what kind of social life you want, and so forth.
“I don’t think retirement should be the goal, I think happiness should be.” Richard Branson
How Much Do You Need to Retire?
A Bankrate survey conducted in 2018 revealed that 61% of Americans have no idea how much money they will need during their retirement years. The absence of this critical information is why so many Americans are not able to maintain their standard of living when they retire.
The next step after visioning is to calculate what it’s going to cost. And keep in mind, it’s not just numbers. You want to determine how much you need to save to achieve financial freedom.
With financial freedom, you can actualize your dreams, no matter your age.
A Financial Planner Can Help You Set Goals
It’s a good idea to sit down with a qualified financial planner to help you come up with a retirement savings plan. He or she will ask you about your vision for retirement and then help you determine how much you need to save. Once you know your target, it will be easier to stay committed to your retirement savings.
To arrive at an accurate number, you need to be realistic about your goals. Include every expense possible, including increasing healthcare costs.
Breaking it Down Makes it Easier to Stay Committed to Your Retirement Savings
Once you have the big number, break it down into smaller chunks, such as weekly or monthly targets. It will not be as overwhelming as saying, “I need to save $1 million!”
Automate Your Financial Life
Staying committed to your retirement savings is no easy task, but one way to overcome the challenges is to automate your savings. A 401(k) is a good start, but you need to max out your contributions too. Set up automatic deductions from your paycheck. You can arrange with your employer to automatically transfer funds from your monthly earnings to multiple retirement accounts. You don’t see it, so you can’t spend it. No temptations.
Track Your Progress
Automating your retirement savings is one great way to be sure you avoid all the temptations, but it also means you don’t necessarily see how your nest egg is growing. Be sure to monitor your progress. Review your savings statements. Track your progress and reward yourself for staying committed to your retirement goals.
Get Rid of Negative Thoughts
Staying committed to your retirement savings takes the same kind of stamina as meeting your fitness goals. Instead of focusing on muscles, you need to build mental strength.
First thing: kick negative thinking out the door. That’s the little voice that says, “you haven’t started saving for retirement yet, no way are you going to have enough to retire…ever.”
Reframe those thoughts. Make them into positive affirmations. Change the “I can’t” to “I am committed” to living a life of financial freedom.
Travel with Peers on the Same Path
You are more apt to overcome the FOMO syndrome if you surround yourself with others who are also committed to saving for retirement. Additionally, a peer group focused on these goals provides opportunities for sharing and learning.