No matter your financial situation, having enough money in retirement is a very common concern. It’s not just the fear of running out of money too soon. You might worry about how you’ll maintain your day-to-day standard of living while also being able to spend more time and money on your hobbies — maybe finally traveling to all those places you’ve put off seeing! After all, no one wants to envision herself eating ramen and living with a roommate in order to afford retirement.
If you’re behind on your retirement savings goals, your fears are likely to be magnified. Not having savings can feel like living on a knife’s edge. Do you cut back now? Or do you live for today and hope somehow, with a lot of belt-tightening down the road, things will come together?
Just because you’ve gotten a late, or no, start on saving doesn’t mean all is lost. You can still salvage your retirement. Here are five tips to get you inspired, help you come up with a plan to build your retirement savings, and get going on it. After all, your retirement awaits you.
1. Start Where You Are
To reach your destination, you’ll need to know what your starting point is. You can do that by writing down all your monthly expenses and comparing them with your monthly income. This can be cringe-inducing — but it’s super important to know what’s going on under your personal finance hood, so to speak. From haircare costs to utilities to eating out to housing and loan payments, try to capture all your regular expenses.
Once you know how much you’re spending, and what you’re spending it on, you’ll have a better idea of where, if anywhere, you can cut back. When I go through this exercise with clients, I find they often uncover “hidden spending,” or cash drains they were unaware of.
Pro Tip: If you’re on a roll, take it a step further and separate your expenses into Needs versus Wants. This will make it easier for you to identify areas you can potentially cut back on or cut out entirely.
2. Figure Out Your Number
This part can be trickier because each person’s number is different. It’s dependent on so many factors. Will you be downsizing from an expensive home and moving to a cheaper area? Might you want to migrate back to the city from the suburbs, where housing will be more expensive? Do you need to budget for regular visits to family in scattered locations?
You might also have chronic health conditions to factor …….