Are You Saving As Much As You Can?Submitted by Balanced Financial Concepts, Solon, Ohio on January 8th, 2021
The importance of having a savings plan can’t be stressed enough. Women have an even greater need than men to begin saving as much as they can early in their careers, since they have a longer lifespan than men1 and typically earn less over their lifetimes2. The Women’s Institute for a Secure Retirement recommends developing three sources for retirement income: individual savings, Social Security and a pension, or retirement savings plan such as a 401(k).
What are simple things you can do now to start saving more?
Strive to reduce the amount spent on common splurges such as daily lattes or going out to restaurants.
Get rid of services you don’t use much, such as gym memberships or cable TV.
Use your phone to find apps that can save you money, such as GasBuddy. You’ll be amazed at the savings.
Channeling these savings and putting them toward an IRA or 401(k) can help you reach your retirement goals. Setting aside between 10 to 15% of your income will help put you on a path to a comfortable retirement. If you have access to a retirement plan through your work, a simple strategy for increasing the amount you save is to increase your savings each year by the amount of your annual raise.
However, saving for retirement can get derailed if you don’t plan for unexpected expenses or loss of income. Consider having three to six months of expenses set aside in an emergency reserve to cover the unplanned costs without having to tap into your retirement savings.
For a personal review of your savings plan and emergency reserves, please reach out today.