Nearly half of all American households have no 401(k)s, no IRAs, or retirement accounts of any kind, SmartAsset reports. GoBankingRates finds that 42 percent of Americans have saved $10,000 or less for retirement, while 14 percent have absolutely no money put away. Furthermore, around 29 percent those closest to retirement age — 55 or older — don’t have a retirement account or a pension plan, according to government records.
The harsh reality is that most Americans don’t have enough money to retire, let alone retire comfortably. Why? Reasons vary among age, gender and salary groups, but most say they don’t make enough to actively save money.
To avoid falling victim from the same fate, you need to plan. With free, easy-to-use tools like a retirement income calculator and a plan to stick to, you can achieve your savings goals and prepare for retirement without stressing out about it.
Here’s how to save more for retirement, no matter how old you are.
Start Saving Right Now
No matter how much you’re able to put away, do it now. The sooner you begin investing, the more your money has the opportunity to grow. Begin with something small — even $100 a month — can result in millions of dollars in compound growth if it’s invested in the right account. If you need some help figuring out how, and where, to allocate your money, you can use financial calculators to explore how to put your income toward savings. Start with the retirement savings calculator to find the goal you’re working toward.
Utilize Your Employer’s 401(K) Program — or Open a Roth Ira
If you’re employer offers a 401(k), accept it and enroll immediately, particularly if they agree to match your contributions. The money will come straight from your paychecks before it’s taxed, meaning you save money now and in the long term.
For example, if your employer promises to match 100 percent of your contributions up to 3 percent of your salary, and you’re earning $50,000 per year, your company will match contributions of up to $1,500 per year. If you’re earning the standard 7 percent return, you’ll have more than $280,000 in 30 years.
If you’re self employed, consider a Roth IRA, which has similar rules about accessing the account before retirement, but is run through your own personal bank.
Create a Monthly Budget, and Stick with It
It’s both the simplest and most difficult money-saving plan ever created: The monthly budget. First, you’ll need to take a night to yourself and pour yourself one of your favorite beverages. Then, take a close look at your bank statements and evaluate which transactions are necessary and which are frivolous. In a spreadsheet, or simply on a piece of paper, write down every necessary expense — including the amount you’ve decided to put into savings — and subtract that from your monthly take home. Using whatever is leftover, determine how much you can spend on the fun stuff. Keep in mind, you should have a little bit left over for emergency expenses.