At age 40, I was already burned out when it came to saving for retirement. Last year, it just seems like saving enough for retirement was an insurmountable problem, especially when most experts say I should save at least $1 million. I was torn between all of my financial obligations such as paying for my sons' college and saving for a nicer home in the future. I recently read about a resolution passed in the Senate to increase personal finance literacy and raise awareness about retirement vehicles through "National Save for Retirement Week." I'm aware of all the ways I could save for retirement, but the problem is making it a priority. Like many people, I used to figure I'd work until I die. A recent survey by HSBC cited by The Huffington Post showed 18 percent or 1 in 5 Americans expect death to be their retirement. However, in the past year I've adopted a new perspective. I am avoiding retirement savings burnout by making small changes.
Going it alone
I temporarily stopped contributing to my 401(k) a few years ago when my company I work for said they would no longer be making matching contributions. After noticing how my retirement savings was stagnating, I decided to just go it alone. I started contributing again to my Roth 401(k) even though I don't receive any matching funds from my company or any tax breaks from the government. It's worth it for me to know I can take money out tax free from my Roth 401(k) when I'm retired.
Ignoring the magic number
I hear a lot about how the retirement crisis in America is due to the fact that few people will reach their ideal retirement number. I don't think there is any magic number or formula that can tell me how much to save. It's impossible to know what kind of return I'll get on my money in the next 20 to 25 years. I was able to overcome my retirement savings burnout by forgetting about a magic number that I should aim for and simply saving what I can afford. I started by saving 6 percent of my paycheck for retirement. As If I receive pay raises, I'll increase the percentage each year.
Living in the now
Another way I overcame my retirement savings apathy was by thinking about how the money I spend now will affect me in retirement. I decided I'll have a better retirement in the future if I own my home outright. When I make extra payments toward my mortgage, I consider that another way to save for retirement. I also spend a little extra money on my floors and home renovations so they last for years to come.
When it comes to investing, I have found it's more exciting to pick individuals stocks that pay dividends. As time passes, I have more shares since I'm reinvesting the dividends or company profits by buying full and partial shares instead of keeping the quarterly payouts. However, when I'm retired, I'll use the dividends to supplement my social security checks. My dream is to have a stress-free journey to a rich retirement.
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