How serious are most working adults about starting or strengthening their retirement fund? If one were to look at the facts inside some formal studies conducted on saving for retirement, the answer would be “not very serious.” According to the 2014 Employee Benefits Research Institute’s Retirement Confidence Survey, (EBRI) the average American has a less than feasible nest egg. The EBRI survey reported that a little over half of American workers have under $10,000 saved for their retirement. The numbers revealed in the EBRI study get even more paltry. A little more than a third of American workers have a measly $1,000 saved for their retirement. The truth is that most working Americans are more concerned with the now. Saving for a new car that they can show off and feel good about is more appealing in the short-term than stabilizing a fund that will get you comfortably through your golden years. It truly takes discipline and changing the way you think in order to get serious about retirement funding. Here are five ways to retrain your brain to save more for retirement.
- Think of “retirement fund” as a different kind of concept.
The words “retirement fund” may increase your fear of growing older, which is what many working Americans have. Renowned author and financial expert Jan Cullinane uses the term “lifetime planning” when referring to building your nest egg.
- Picture your dream retirement place of residence.
Mentally conjuring up an opulent place to live during your retirement is another motivator for saving for the future. It can help you look forward to a life of splendor in your golden years that others will envy.
- Hold yourself to any promises you make about contributing more to your retirement fund.
Another important thing to do when saving for retirement is to contribute more to your fund as your yearly income grows. You can’t just talk about it. You have to follow through on it.
- Incentivize saving for retirement by setting up a reward system.
Here’s another motivator. Suppose your retirement savings goal is $1,000,000 dollars. Treating yourself to an extravagant gift once you reach the halfway mark is a good way to help you re-think your strategy.
- Use a strategy that has the smallest amount of resistance.
Thinking small is a simple but powerful idea, which helps many people succeed financially. Start with small steps to turn your finances around like putting aside just 1% of your money for retirement a year. Then over time, increase the percentage to 15 – 20% per month. Using a retirement savings strategy that takes gradual steps will have you surprised at the progress you’ll make in the long run. If you’re interested in organizing a retirement savings strategy, bolstering your investment portfolio, or any other financial service, contact us.