Since I recently turned 40, I realized I needed to play some retirement catch-up. Fortunately, it turned out my husband is on the same team. We both have a lot of work to do to save enough money to retire in another 25 years.
Many financial experts would say we each need $1.5 million to retirement comfortably. We both got a late start since neither one of us had a 401(k) plan in our 20s. In our 30s, we needed most of the money we earned to make the mortgage payment and pay our various bills.
We decided to come up with a few easy ideas so we could save an additional $500 toward our retirement savings plans each month.
Cutting out the bad habits
Since we would both like to live as long as possible, we chose to cut out several bad habits that could have shortened our life spans. We both stopped buying soda pop and fast food. In addition, I agreed to stop having a glass of wine when we go out to dinner.
With these small changes, I came up with $50 we could add to our retirement savings each month.
Rethinking our mortgage
Even though I love the idea of being mortgage free in another 5 to 10 years, my husband and I will still need to continue working in order to be eligible for Social Security. I decided to stop paying so much extra on our mortgage. I freed up $250 a month that could be funneled instead into our retirement accounts. We will still be mortgage free by the time we retire anyway. And our mortgage interest rate is low at 4.5 percent.
Delaying big purchases
I have several major home renovation projects that I have been saving up for each month. I now know that my money would be better spent by investing in stocks and bonds in my retirement account. I can hold off on new kitchen floors, that brick paver patio and new French doors. I am now putting the $100 a month I saved for furniture and housing renovations into our retirement savings.
Giving up the vanity purchases
I was spending quite a bit of money on my appearance. Now I realize I can do my own nails at home. I can pay less by having my hair cut and colored less often. I also don't need the latest fashions from the mall. Instead, I figured out ways to update what I already own for each new season. The $100 I used to spend on vanity purchase will now help us secure a better retirement.
Playing retirement catch-up hasn't been easy. We decided it's better to make a few small sacrifices now so we will have a more carefree retirement later. I just wish we had started when we were much younger. Twenty five years may seem like a long time, but it goes almost as fast as our monthly paychecks.
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