Things You Control
Despite the factors you can’t control, there’s still a lot you can control. The goal is to focus on those things and make sure you’re doing what you can to maximize your retirement saving options. These are the things to pay attention to:
1. Saving Amounts How much you put away for your retirement is entirely in your control. You can decide to put away 5% a month or 35% a month! If you want to make real progress in saving for your dream, you’ll need to make some sacrifices to get there. You can’t save a small percentage of your income now and expect a great retirement later.
2. Your Spending Listen up: Too many people blow their money on fancy coffee and expensive clothes when they should be putting that money away for retirement! I can’t imagine telling my kids that I have to live with them in my old age because I wasted my money on a $300 pair of jeans or a $500 phone. Remember that the next time you’re tempted to splurge.
3. When You Start Saving Sometimes people tell me they’ll get serious about retirement later—after they turn 30, after they get married, after they pay for kids’ education, after the economy recovers. When you wait, you lose precious time. And time is money when compound interest is in the picture! Save early and keep saving.
4. Your Portfolio You get to decide what you invest in. I always recommend mutual funds because they minimize some of the risk if one market segment (like overseas markets or small cap funds) isn’t doing well. If you don’t feel like you control what’s in your investment portfolio, then find an investing professional who will help you reach your retirement goals.
You control one other element that can make or break your retirement savings: your attention. If you don’t stay laser-focused on that dream retirement, you’re likely to get off track with your budgeting, spending and saving. On the other hand, if you keep your eye on the prize—your retirement dream—and the factors you control, you’ll be enjoying that new chapter of your life before you know it!