The New Year is well underway, so how are your resolutions holding up? Most of us have already given up on one or two, but I have a recommendation for a resolution that’s easy to keep and has major rewards − and now is a great time to make it. Why not resolve to start saving for retirement or to save more in your employer’s retirement savings plan? Here’s how:
- Make your job pay. The most effective way to save for the future is in your employer’s retirement plan. Review how much you are contributing now and see if you can increase it. A small increase now will mean bigger savings down the road.
- Make a match. If your employer makes a matching contribution, take full advantage of this free money by contributing enough to get the full match. For example, if your employer matches 50 cents for each dollar you contribute up to a certain amount, this is a 50 percent return on your money − and you don’t want to pass that up.
- Make a budget. If you are having trouble saving, take a look at what you earn and how much you spend. Put together a budget to help you keep track of where your money goes and develop a plan for how you want to spend your money. This will help you find where you might be able to reduce your spending and save, including contributing (or contributing more) to your employer’s retirement savings plan. Start small if you need to, but even small savings can make a big difference over time.
- Make a list. Write down your goals; it can be easier to cut spending today if you have specific goals for tomorrow. There are many ways to reduce expenses − and yes, one of those ideas is GIVE UP cable TV (maybe not all 1000 channels but 600 of them). By reducing the number of channels you can potentially cut your cable bill in half. You may prefer to take your lunch or your coffee to work. Or you can take steps to increase your income by taking a second job or working longer hours.
Remember: A few small changes can make a big difference for your retirement security. Make saving a habit. It’s not difficult once you start.
Use our Savings Fitness worksheets to set goals, create a budget, manage debt and estimate how much you should be saving for retirement. You can also learn more by reading New Employee Savings Tips – Time Is On Your Side and Taking the Mystery Out of Retirement Planning or go to askebsa.dol.gov to request a print copy.
Phyllis C. Borzi is the assistant secretary of labor for the department’s Employee Benefits Security Administration.