According to several recent surveys, 40% of people plan to delay retirement. Besides a stock market that would make an avid roller coaster rider turn white, lack of savings and poor investments are the primary culprits driving this statistic.
Save more. Think you can’t afford to cut back on a few expenses, Take the time to track exactly where your money goes, and you might find that sparing yourself an extra $100 or $200 per month isn’t so painful.
I continue to find one thread of commonality in my personal financial life. It’s not credit card debt. Or lack of adequate income. It’s my ability (or inability) to consistently sock money away. I have a bad habit of leaving money in my checking account—because I like to see it there. Makes me feel good. But, inevitably, it gets spent. Automatic saving only works if you do it automatically.
Save longer. Even if you don’t cancel your retirement, postponing it for a few years can be amazingly powerful. During those extra years, you’ll be able to sock away thousands of dollars, retain your job benefits (such as health insurance), and put off tapping your nest egg.
Good thing for my employer’s retirement plan. The longer I stay, the bigger it gets. But, even that has an opportunity cost.
Invest more effectively. Your long-term money should be invested largely in stocks, since it’s hard for any other asset class to beat them over the long haul.
Did you miss it? There’s a subtle word in that statement. Stocks. Not stock mutual funds. Not ETFs. I won’t get into it here but you can read more about why I’m not a big fan of mutual funds.
What’s most important is to start saving now. Many people think it’s too late so why bother. Even if you have to work longer than you planned, you still need the piece of mind that comes with building a cash cushion. And what’s retirement anyway? Maybe you should start saving so you can invest in yourself.
Read more about retiring rich so you can watch your neighbor work forever.