Everyone faces retirement at some point, and it’s a wise financial strategy to start saving for retirement as soon as you can. Unfortunately, up to 66% of Americans under 40 don’t have any retirement savings.
“Many of us tend to say, ‘I’ll get to retirement savings later,’ or ‘I have all the time in the world,'” said Carrie Schwab-Pomerantz, a certified financial planner. “Consider the ‘minus 10% rule’: If you’re in your 20s and you put aside at least 10%, you should have a relatively comfortable retirement at age 65.”
But with many Americans under 40 living on wages that are lower than average, it can be difficult to find money to save for retirement. This is especially concerning because 70% of Americans turning 65 will need some type of long-term care and almost 76% of Americans have little to no emergency savings.
So how can you find a way to save a little here and there toward your retirement fund? Consider the following four tips to help you budget your funds for saving more for retirement.
- Eat at home more often. According to a Technomic report, approximately 41% of people eat pizza at least once a week. Making food at home can be a battle, especially when you’re working and have kids. It’s easier to pick something up after work so you don’t have to worry about finding the energy to make something at home. But making food ahead of time in a crock pot or even meal prepping and making your own freezer dinners can save you a lot of time and money. Consider choosing a day once a week where you make something ahead for the rest of the week, even if it’s just the next two days. It’ll help you stay on budget and gives you the ability to put more money in your retirement savings. (Here are some frugal recipes to help you.)
- Match your employer’s 401(k). If your employer offers to match your person 401(k) contributions, it’s worth contributing enough to take full advantage of that match. For instance, let’s say you make $50,000 a year and contribute $2,500 to your retirement plan. If your employer offers to match 50% of your contributions up to 5% of your salary, your employer could put in an additional $1,250 to your 401(k).
- Don’t break your budget to attend every event. According to a recent report from Credit Karma, up to 20% of Americans have gone into debt to attend a wedding, 2.4 million of which happen every year. This may sound like a high percentage, but the events leading up to the wedding include the engagement party, bridal shower, bachelorette party, and bachelor party. And then there’s the wedding itself. When you’re faced with wedding season, consider picking and choosing the events you go to, especially if you’re invited to a destination wedding (did you know destination weddings make up 24% of all weddings?). Maybe attend one couple’s wedding and another’s reception instead of going to every event. This will not only keep you within your budget so you can save more for your retirement plan but it’ll also keep you from going into debt.
- Don’t pay more for your energy than you need to. If your home’s energy bills leave you sweating every month, it may be worth considering taking a look at your home to make sure you’re not paying more than you need to. An older, inefficient HVAC system can suck up a lot of energy. And if your home isn’t properly insulated, your HVAC system could be running without providing you with the heating or cooling you need. In fact, according to the Environmental Protection Agency’s Energy Star Program, you could slash your energy bills by up to 20% by properly sealing air leaks in your home. You can save more money and use significantly less energy by insulating your home, using an Energy Star HVAC system, and retrofitting your lights.
It may be challenging to put money awat for retirement when you don’t have much to put away to begin with. Sometimes your laser hair removal sessions or other beauty appointments might need to wait. But by cutting back on little things and following the tips above, you could save a little more here and there to put away for retirement.
What ideas do you have for saving more for retirement?