Most of us know that we should be saving for retirement. But finding the motivation to save is a real challenge. Consider these strategies to tuck more money away for retirement in 2017.
Save your raise. If you get a raise in 2017, aim to put at least a good portion of it in a retirement account. The logic behind this is, up until this point, you’ve not received that money anyway, so don’t get used to living on it. Instead, save it.
Invest your windfalls. When you receive a windfall of cash such as a bonus, tax refund or inheritance, consider investing for the future instead of immediately spending it. Try to complete all of your financial goals out of your salaried income, and have the bonuses go straight into savings. You can even directly deposit part or all of your tax refund in an individual retirement account.
Create an emergency fund. Just because you are saving for retirement doesn’t mean that your money has to be in a PPF account only, which will be freezed for 15 years! You can invest in a traditional mutual fund or SIP, the result of which can be transferred in the retirement savings later on. In this way, there will be a contingency fund always at your disposal.
Save at least Rs. 1000 more. A small increase in retirement account contributions can add up to a substantial amount by the time you get to retirement. Increase your contributions by Rs. 1000 every six months. Every little bit will help you reach your goal.”
Consolidate your accounts. The first step in increasing your savings is to know what you already have. So consolidate all your accounts and investments. Write down the maturity dates, maturity amount, re-investment plans everything, so that you will have a clear idea about your funds.
Redirect debt payments into savings. When you finally pay off your student loans, credit card debts or other past purchases, consider putting the amount you used to spend on debt payments into a retirement or savings account. Your budget won’t feel the difference, but your long-term savings goals will.
Ramp up your career. If you aren’t earning enough money to invest a respectable amount for retirement, you may want to start acquiring the skills that will allow you to negotiate a higher salary. Perhaps that means taking a class to learn a new skill or maybe going back to school and earning a new degree all together that enables you to secure a higher paying job.