3 actions to take now to save more for retirement
October 21, 2010
by Bob Glovsky | MoneyRates Guest Contributor
This article is part of a MoneyRates.com series, 10 steps to a comfortable retirement.
Everyone knows that saving isn't easy. Like any goal worth attaining, saving for retirement takes perseverance, patience and discipline. The sooner you begin to take control of your financial future, the more savings you can create.
Here are three steps anyone can take immediately, no matter what stage of life you are in, to create a path to augmented retirement savings.
Find a partner
Despite concerns about saving and managing income for retirement, nearly two-thirds of American households do not have a written financial plan, according to a 2009 survey by the CFP Board. So, if you don't already have one, find a Certified Financial Planner™ professional to help you set achievable retirement goals and implement a plan to attain those goals.
Unlike other financial planners, CFP® professionals are held to a fiduciary standard of care, just like a bank, and they are bound by a strictly enforced code of ethics. CFP® professionals take a comprehensive look at your overall financial picture and serve as partners in planning and implementing your retirement savings process, helping you set specific, realistic and achievable goals.
Save automatically and use your employer match
The Department of Labor says more than 25 percent of employees eligible for their employer's 401(k) plan don't participate. This gap needs to close. Fully fund your 401(k) at least up to the employer match. Even though it may pinch your budget in the short run, in the long term it is a sure strategy for a larger nest egg. Pre-tax saving today leads to lower tax liability, once again saving you money. And the match is free money.
And, while considering your tax implications, look into converting a traditional IRA to a Roth IRA. The 2010 rules have eliminated the income test and allow for half the taxable amount to be taxed in each of the next two tax years. It is complicated but worth a look.
Build a third act while building your savings
While not all of us are willing or able to continue working past the incumbent age of retirement, many successful retirees find a hobby or part-time work that enables them to build on their liquid emergency fund or savings account. A good rule of thumb is to have at least six to eight months of living expenses in this savings account.
By closely tracking all of your spending and living by a set budget, you can continue to build new financial security at the same time you discover a new talent or zest for life.
Read more financial advice from our series, 10 steps to a comfortable retirement.
About the Author:
Bob Glovsky, JD, LLM, CFP®, is the President of Mintz Levin Financial Advisors, LLC, in Boston, which was founded in October 1998 to provide wealth management and investment advisory services to individuals and families. Mintz Levin Financial Advisors counsels clients on asset allocation and investment strategies and offers comprehensive, customized investment advisory and financial planning services. In 2004, 2005, 2006, 2007, 2008, 2009 and 2010, Wealth Manager magazine chose Mintz Levin Financial Advisors, LLC as one of the nation's top wealth management firms. Mr. Glovsky currently serves as Chair of the Board of Directors of the Certified Financial Planner Board of Standards.