Starting late? Here’s how to save for retirement even if you’re behind…

Think you're screwed? Here's how to save for retirement even if you're behind...

Photo by CC user American Advisors Group on Flickr

A common misconception is that you have to start savings regularly in your 20’s to have a shot at retiring in comfort. While this certainly makes things much easier on you, most people have financial lives that are so complex that they haven’t been able to start until now.

“Now” might mean you are in your 30’s, 40’s, or even your 50’s and beyond. However, this doesn’t mean you won’t be able to retire – it just means you’ll have to get creative with your efforts.

Adam Rosenfeld Miami would agree that it is never too late to begin saving for retirement, so if you are starting late, here’s what you’ll need to do to get on track.

1) Retire your consumer debt

After setting aside six months expenses in an emergency account, supercharge your belated retirement earnings by taking immediate steps to retire your consumer debt.

The interest rate on the average credit card is around 20%, which makes saving for retirement in this scenario about as effective as going for a jog with an open parachute on your back.

By attacking your balance owing, you’ll quickly eliminate interest payments, which is that giant sucking sound that is siphoning off the money that you could be using to build your wealth.

2) Set up a monthly auto-withdraw to your retirement accounts

One of the biggest impediments to disciplined retirement saving is having to physically place money in an account every month. In this modern age, it is possible to set up an automatic debit that will put in a set dollar amount into your retirement account every month from your checking account.

With all the things that are occupying our mind these days, having to remember to save for your future shouldn’t be one of them (not because it isn’t important, but because it is such a no-brainer that you should be able to free up your mind from it so you can tackle other matters of importance).

3) Take most (if not all) of any subsequent raises off the table

As you advance through your career, you will (hopefully) get raises that will reflect your senior status in the company that you work for.

Instead of allowing this extra money to contribute to lifestyle creep, figure out how much extra you have to play with, and dump all of it into your retirement accounts.

While it may be tempting to use it to keep up with the Joneses, know that behind all those flashy toys is a couple/family that is likely up to their eyeballs in debt. Besides, the best things in life are free or relatively inexpensive; don’t fall into the “expensive is better” trap.

4) Relocate to a cheaper residence/city

It can be easy to get attached to living in an “in” neighborhood, or a city that has a highly desired quality of life. However, the savings that can be realized by moving to a cheaper part of town or the country are so great that you should strongly consider doing it.

The latter point is becoming increasingly possible with every passing year, as many jobs can be done digitally, thereby making it possible to work them from anywhere.

Don’t assume that you’ll have to move to some boring town in the Midwest either, as there are plenty of engaging places to live that won’t bankrupt you before payday.

In America, spots like Colorado Springs (right in the mountains with homes in the 200’s), Pittsburgh (hipster paradise), and Nashville (country music capital of the world) all have reasonable living costs while delivering an enviable quality of life, so shop around and find a spot that allows you to both enjoy life and save for your retirement.

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