Start Planning Now for a Secure Retirement: Saving is the Key

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The following article is by Miss T from Prairie Eco-Thrifter. If you want to learn how to live your dream life in a sustainable, healthy, and money savvy way, check out her site here.

It’s never too late to start planning for financial security in retirement. While the best scenario is achieved by starting early, late starters can do a lot to make sure they can retire comfortably. Don’t put it off any longer. The sooner you start, the more money you will have behind you when you choose to retire.
You’re not alone if you have reached age 40 or older without any significant retirement savings in place. Recent surveys have shown that nearly half of all workers in the US don’t have any form of retirement savings. Only a very few people, who do have a retirement plan, save the recommended 10 -15% of their earnings.
The ideal scenario for retirement planning is to start with your very first pay check and put away a set percentage of what you earn, every time you get paid, for the whole of your working life.
Don’t feel bad if you haven’t done this; less than 5% of all workers have followed this plan. Who wants to save for retirement when you’re in your early twenties and just starting out in life? There’s plenty of time for all that, surely!
The thing is, no matter how old you are now, the time to begin retirement saving is NOW! The best time was actually yesterday, but let’s not get too pedantic.

The Best Retirement Planning Advice I Ever Received

Possibly the best retirement planning advice I was given came from my elderly neighbor, who had been an investment banker in his time. You’d think he would have advised me on investments, but he talked about more basic strategies. His advice was to make use of the ‘vehicles’ that are in place for retirement saving. By this, he meant employer 401Ks, Roth IRAs and other types of IRA. He said that too many people look for fancy ways to invest their hard-earned cash when these entities are there for the taking.
So, follow my experienced neighbor’s advice: check with your employer about a 401K and ask whether there are employer contributions available – this is virtually free money, so why not? Get some professional advice about other retirement savings plans and choose the ones that suit you best.

The Key = Regular, Periodic Savings

The key to a financially secure retirement is saving; even small amounts, saved on a regular basis, can add up to a decent amount on retirement. You owe it to yourself to make the decision – start now to put aside a set amount from every pay, even just $5 or $10. The secret is to make a start and increase the amount later.
Of course, if you are already in your 40s or 50s, you are going to have to really ramp up the savings to build your retirement fund much faster in a shorter time. This will probably take some serious changes to how you spend your money; it did with me too.
At first, I thought there was no way I could spend less, but once I started to look into it with an open mind, I found it reasonably simple to find areas where I spent too much and could cut back. I didn’t need anything too drastic to start with, but once I got started, I kept finding more ways to cut spending by a few dollars here and there. That’s the trick, you see; don’t try and make huge spending cuts, just look for lots of places you can save a few dollars. It soon adds up, let me tell you! I found that savings of less than $45 a week meant a nest egg of more than $60,000 when invested at just 4% for around 20 years. This gave me the motivation to cut even more in spending and find a higher interest rate.
Cash savings alone probably won’t be enough to fund your retirement; you will need some investments as well. Investments allow your money to actually work for you; invested funds make money on your money. Choose investments that suit your age and income; this is where a financial advisor can really help.
You’ll need a budget to help you see where you spend your money as well as some basic retirement funding calculations. I found some excellent free resources online that helped me with these calculations.
When you know approximately how much you’re going to need in retirement, you can calculate how much you need to save during your remaining working years. You might find that you’re going to have to work longer than you planned, if you’ve left your run a bit late. Consider a second job and put those earnings straight into savings. Many retired people continue to work part time to help fund their later years.
If you’ve really left your savings late, you might need to look at some major changes to your lifestyle so that you can fund a decent retirement. Become committed to your financial future and make those tough decisions before it’s too late. Consider down-sizing to reduce your mortgage or get rid of it completely. Pay off any high interest loans and get credit cards paid off so you aren’t left with on-going debts as you approach retirement.
Procrastination is the enemy of a secure retirement. While it is never too late to get started on a retirement fund, the longer you put it off, the harder it’s going to get.
So, make the decision and start NOW. You owe it to yourself to fund a comfortable retirement.
So, have you started saving for your retirement? What has been your strategy?

    ***Photo courtesy of


    1. I am totally saving for retirement. I set aside a dollar amount per paycheck and it goes to my Roth IRA and Roth 401k. I started early and am so thankful even though I'm only a couple years into saving.
      My recent post Two Huge Problems with Dividend Stocks Right Now

    2. It is great that you have made your savings automatic. That is huge. It is hard to put that money away once it is in your hands. The fact that you never see it is the key to your success. Good for you for thinking ahead and starting to save early.
      My recent post How to Have a Green Christmas

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