6 Lessons of the Harvest for Savers

Happy Thanksgiving From MoneyRates.com: Your Savings Rate May Benefit from Some Thanksgiving Lessons

Thanksgiving has its roots in a celebration of the harvest. Therefore, as Thanksgiving approaches, it is a good time to reflect on how traditional harvests might hold some lessons for retirement savers.

The Roots of Thanksgiving

We associate the Thanksgiving holiday with the Pilgrims, even though it was Abraham Lincoln in the 1860's who first declared a national day of Thanksgiving, and it wasn't until 1941 that it became a national holiday. Still, long before it became formalized as a holiday, a thanksgiving feast was a tradition both for the Pilgrims and for the American Indians. It was a way to mark a successful harvest--a celebration of the fact that all the hard work of planning, cultivating, and reaping had paid off.

6 Lessons of the Harvest for Savers

In modern times, the most important "harvest" for most Americans will come when they start drawing on their retirement savings. With this in mind, there are six lessons from a successful harvest that can be applied to retirement savings:

1. Plan your harvest well in advance. Naturally, the Pilgrims didn't just wake up one day in the fall and decide to have a feast. After all, they couldn't just go to the supermarket for supplies. It took careful planning well in advance to make sure they'd have the food they needed when the time came--not simply for a feast, but to see them through the winter ahead. Similarly, you can't wait till the tail end of your career to start retirement planning. The sooner you target a savings rate toward your retirement needs, the more manageable that savings rate will be.
2. Diversify your crops. Some crops would be more productive than others in any given year, so the Pilgrims knew it was important to diversify by growing different things. As your savings build, you should do something similar. You should have a range from conservative investments like CDs, savings, and money market accounts to riskier investments like stocks.
3. Care for your crops. The Pilgrims couldn't just plant their crops and then come back a few months later and assume everything would be ready for the harvest. In the same way, you have to monitor your deposits, making sure that your bank rates and fees remain competitive.
4. Supplement your harvest. In addition to growing crops, the Pilgrims also hunted as an additional source of food. You may have an employer-sponsored retirement plan, but the more you can supplement this with personal savings, the better you'll be able to live in the long run.
5. Set some stores aside for lean years. Not every growing season is productive, so like all farmers, the Pilgrims learned how to dry, mill, and store foods for times when the crops were disappointing. You have to build up savings rates in good years for the economy and the stock market, because there will be years when conditions are tougher.
6. Celebrate your harvest. Again, Thanksgiving is a celebration of the harvest, and you should let this spirit of celebration carry over into your retirement savings. Learn to appreciate the feeling of having your savings on track, and look forward to what that will mean in the long run.

Like the Pilgrims, if you apply all these lessons conscientiously, you will have earned a happy Thanksgiving.

Source:
History.com: http://www.history.com/content/thanksgiving/the-first-thanksgiving

 

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