Rules To Saving For Retirement
A recent study revealed that corporate
America's commitment to workers' retirement plans, has dropped
consistently over the last decade. The research found that the total
retirement benefits provided to employees decreased from 7.8 percent
of pay in 2002 to 6.9 percent of pay in 2008 and the value of the
overall benefits declined from 9.4 percent to 8.6 percent of pay.
As more than half of all workers in the
United States, 53 percent, have less than $25,000 in total savings
and investments and with longer life expectancies and rising costs,
especially for health care, it is critical that Americans understand
the importance of taking matters into their own hands, stop solely
relying on their employers to contribute to their retirement and
start saving for their own future. Now is the time to start
saving for retirement:
The Automatic Rule:
saving money today. Even if it’s only a buck or two each pay period,
savings is a habit you must start and stick with for the rest of
your life. To improve your chance of savings success, automate the
process. Have money withdrawn automatically from your paycheck or
directly from your checking account each month. If you don’t want to
think about saving, automation can take care of it for you.
The 1% Rule:
At a minimum
save 1% of your earnings each payroll period. When you get a salary
increase, add an extra percent to your savings and spend the rest.
For example, when you get a 3% increase at work, save 1% and spend
the other 2%. This way you’ll continually increase your savings rate
while enjoying a higher standard of living.
The Time Rule:
meet with people in their 50’s and 60’s, the one regret they have is
that they had wished they’d starting earlier in life. It’s never
too early or too late to start saving for retirement. Time is your
friend. It can work for you or against you. It’s your choice.
The Spending Rule:
money you take out, the lower inflation is, and the higher return
you earn on your money, the longer it will last. Conversely, the
more money you take out, the higher inflation is, and the lower your
return is, the shorter your nest egg will last.
The Most Important Rule:
The government and
your company will not take care of you. Read, listen and learn about
personal finance, investments and strategies. In the end, your
financial well-being is your personal responsibility. Control what
you can control.
Bill Losey, CFP®, CSA, America's Retirement Strategist®, is a
highly sought-after advisor, retirement authority, thought-leader,
author and TV personality because he makes the complicated and
mundane topics of investing and retirement fun! Bill has over 20
years experience in the financial services industry and is a
Certified Financial Planner practitioner, a Certified Senior Advisor
and Certified Retirement Coach. He is the author of Retire in a
Weekend! The Baby Boomer's Guide to Making Work Optional (a 2008
Finalist at The Indie Excellence Book Awards), Founder of National
Retirement Planning Month, and he publishes Retirement
Intelligence®, an award-winning weekly newsletter that reaches
thousands of subscribers worldwide.
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