5 Smart Ways to Start Saving for Retirement Now

Although no one enjoys thinking about how their life will change as they age, it’s never been more important to plan ahead. About 51% of elderly people who need care live at home, 29% reside with a family member who provides care, and 4% are in nursing homes and assisted living facilities. Regardless of your living arrangements after retirement, your care will likely cost more than you anticipate. For this reason, beginning to save as soon as you can for retirement is vital. And yet, between 15% and 25% of Americans have saved nothing for their golden years. Here are five ways to start saving for retirement or grow your existing investments while you have the ability to do so.

1. Trade Takeout For Home-Cooked Meals

It’s simple: learn to cook and you’ll potentially save thousands of dollars that you can put away in a retirement account. You don’t have to become an expert chef to make tasty, good-for-you meals that will replace costly restaurant and takeout food. You’ll also contribute to your overall health, which may save on healthcare costs when you’re older.

2. Cut Down On Online Shopping

It’s easy to spend too much on online, as purchases are just a click away. You can use apps to track your online shopping time and to block retailers’ websites, remove your credit card information from favorite sites, declutter your home, unsubscribe from retailers’ newsletters, and entertain yourself online with sites that aren’t shopping sites. Make a budget and establish just how much you can spend on non-necessities to ensure you aren’t tempted.

3. Have a Small Wedding

In the 1950s, the median age for getting married was 20 for women and 23 for men. By 2004, those numbers rose: age 26 for women and age 27 for men. Couples may be delaying marriage, but that doesn’t mean they’re always spending less on weddings. If you opt for a smaller wedding, you can use the savings to invest in a retirement account.

Say you can actually spend $40,000 on all the trappings for your special day. Is that the wisest financial move? Not if you haven’t started saving for retirement. If you’re 25 years old and you decide to invest $39,000 in retirement accounts while spending just $1,000 on your wedding, you’ll be able to watch that money grow for decades. With smart investments, your $39,000 could become $1.77 million in 40 years. It’s true that $1,000 is just enough to hire an officiant and host a modest party, but that may not satisfy many couples and their families. Still, any significant amount you can take from your wedding fund and invest instead for retirement will make a huge difference.

4. Rent Your Home on Airbnb

In 2016, approximately 27% of adults in the United States rented their homes. Ultimately, that means that landlords are thriving in today’s economy — and you might have an opportunity to join their ranks. This trend is appealing to those of us who are seeking ways to make extra money. If you’re an older adult, you probably have unoccupied bedrooms in your home and you likely spend more time away from home than younger people do. But under 10% of Airbnb hosts are over 60. This means that older people are missing out on a great opportunity to supplement retirement savings. And even if you’re a younger homeowner, you might not be taking full advantage of your extra space.

You may not know how Airbnb and similar platforms work. Consider using the services of a company like NestFiller to help you fill unused space in your home. NestFiller manages the listing and communicates with guests on your behalf. You’ll make money without having to lift a finger, and you can use those funds to add to your retirement savings or enjoy activities you haven’t been able to afford since you left the working world.

5. Use Apps for Retirement Savings

The sooner you start saving for retirement, the better. Compound interest builds your funds significantly if it has more time to do so. But if you haven’t started a retirement fund yet, you may think it’s all too complicated to consider now when you have immediate financial priorities. Savings apps can help you begin putting away money for retirement today, and make the process easy. Here are some apps you can use for automatic savings:

  • Betterment: This app makes saving for retirement easy by creating a portfolio just for you, basing it on factors such as your age, goals, income, and tolerance for risk. It’s ideal for people who are not experienced with investing and are looking for an account that is simple to start and maintain.
  • Acorns: This is a great app for those who want to take the easiest route to retirement savings. When just paying your everyday expenses is a challenge, setting aside a portion of your income for retirement may not seem doable. The company believes that anyone can grow their investments, no matter their income. This app connects to your debit and credit cards and rounds up the amount of each transaction to the nearest dollar, taking the remaining “change” and putting it into investments.
  • Digit: An app that helps investors whose income fluctuates, such as freelancers and other self-employed workers. Digit looks at your average daily account balance and compares that to your spending, then transfers small sums to a savings account several times a week. These sums are barely noticeable but can potentially build to a significant amount by month’s end.
  • Stash: Designed for those without investment knowledge, this app provides step-by-step assistance as you create a portfolio. They’ll explain your investments in plain English. It’s a good option for people who want to understand where their investment funds are going and what their accounts are accomplishing for them. Considering that the big data industry is worth almost $190 billion and growing, it might pay to learn about investing.
  • Personal Capital: This app uses algorithms that quickly adjust your investments in accordance with changes in the market. It also provides access to financial advisors who can address your concerns through phone, email, or chat. A key feature is that the app analyzes your anticipated Social Security income, your investments, and estimated expenses to predict if you’ll have enough money for retirement.

Saving for retirement may seem like a nearly impossible task if you haven’t started the process yet. Take a few simple steps to cut down on spending, make extra money, and sign up with retirement savings apps, and you’ll be well on your way.

Speak Your Mind

*