1.Focus on starting today
Especially if you’re just beginning to put money away for retirement, I recommend that you start saving and investing as much as you can now, and let compound interest — the ability of your assets to generate earnings, to have an opportunity to work in your favor.
2. Automate your savings
Leaving savings as a last priority is often the result of stagnant or depleting bank accounts. You would have probably heard the phrase “pay yourself first.” Make your retirement contributions automatic each month and you’ll have the opportunity to potentially grow your nest egg without having to think about it.
3.Gradually increase your contribution rate: a little extra can help make a big difference
The amount you contribute to your retirement plan today will make a big difference in how much you have when you are ready to retire. Just increasing your contribution rate by just 1% in a year could add over $52,000 to your nest egg over 30 years, assuming a $150,000 annual salary.
4. Set a goal
Knowing how much you will need makes the process of saving and investing easier. Set milestones along the way, and reward yourself as you pursue your retirement goal.
5. Squirrel away extra funds
Got a bonus? Don’t just spend all of it. Every time you receive a pay raise, increase your retirement contribution percentage. Dedicate at least half of the new money to your retirement plan. Don’t treat these extra funds as new found money. This will lead to a spiral of lifestyle inflation. Treat yourself to something small and use the rest to help make big leaps toward your retirement goal.
Disclaimer: The views expressed here are solely those of the author in his private capacity and not necessarily to the author’s employer, organization, committee or other group or individual.