dreamstime_xxl_3355705-300x200Are You on Track for Retirement Savings?

Americans are just not saving enough for retirement.  Fidelity Investments, the nation’s largest 401(k) administrator, reports that the average balance in its retirement plans was $72,800 at the end of June 2012. If you expect to retire at 65 and live another 20 or 30 years, that amount won’t get you far.   Here is the strategy that we have found works best for saving for retirement:

Determine what You Need

Figure out with your Certified Financial Planner™ what you will want in retirement.  From there, he’ll help you calculate how much you will need to have saved to fund your desired retirement.  Having this end-goal in mind will help super-charge your efforts and enthusiasm.

Calculate exactly How to Get There

Your CFP® can figure how much you have to save each month in order to accumulate what you need, taking into account earnings, inflation, and interest rates.  Knowing the monthly amount will help you stay focused on your plan even when you are tempted to backslide.

Automate the Process

Arrange for your monthly savings amount to be automatically deducted from your paycheck or your checking account.  Then you won’t have to think about it.  You won’t be tempted to put it off this month because of some unusual circumstance.

Raise Your Sights

Every time you get a new job or a raise from your current job, see if you can raise your savings rate.  The more you save, the faster you’ll get there and the more enjoyable it will be.

Adjust the Plan

Meet with your CFP® periodically to make any necessary refinements to the plan.

What Not to Do

It is easy to say, “I’ll just save whatever I can,” which leads to a retirement plan of “We’ll just make do on whatever we’ve managed to save.”  As simple and easy as that seems, it has been our observation that it almost never works very well.  If you want a retirement above the subsistence level, you should make and follow a strategic savings plan.