Most of us aren’t very good at saving for retirement. It’s not our fault – really it’s not. We just aren’t wired to get excited for something that may or may not happen 30 or 40 years from now.
Although we aren’t wired to prepare for our retirement, I think it is still something we should consider. You can actually make the process relatively simple too.
Here are three ways to ensure you will be better off in retirement than 95% of the population.
Automating your savings is absolutely the best thing you can do with your money. Personally, I have 6% of my pay check go into my 401(k) every month. Additionally, I have other money go into a Roth IRA and an account for personal development (the best investment you can make). If you don’t have a 401(k) just have the money automatically deducted each month.
Think about savings like your mortgage. You probably have your mortgage or rent payment automatically come out of your checking each month. You should do the same with your savings and then forget about it.
Think Short Term for the Long Term
Instead of thinking about how much money you need when you retire, set goals for six months from now. Determine how much money you want in your retirement accounts in six to twelve months.
This is fun because you can set small goals that will add up over time. It is amazing how quickly you can save $1,000 and then $5,000. This can really become addicting in a good way.
Don’t just let your company decide how your money is invested and don’t put it all in one investment. These are two sins of 401(k) plans.
Make sure your money is invested in different asset classes. This includes domestic stocks, international, small cap, bonds, real estate, and more.
If you follow these three steps, you will be on your way to