The Blog


With all the other expenses that life brings – such as a mortgage payment, education savings for the kids and the cost of living – retirement savings may not be at the top of your priority list. However, the truth is that everyone should be planning for retirement because we all want to retire someday.

According to Fidelity, Americans are living longer than ever before; this increases the importance of (and need for) retirement savings. According to one recent study, “a man who reaches age 65 today will live (on average) until age 84 and a 65-year-old woman will live to an average age of 86.” Will your current savings support a financially stable retirement?

Regardless of your age or income, you can afford to save for retirement. You just need to know where to look.

Here are four ways to maximize your retirement savings:

Participate in your employer’s retirement plan

The first place to start boosting your retirement savings is with your employer. If your employer offers a matching investment plan (i.e. dollar for dollar or similar) such as a 401(K) or a stock ownership plan, it’s a good idea to take advantage of this “free” money. Employer plans allow contributions to be directly deducted from your paycheck; this helps to ensure continued savings.

Open an IRA

If an employer savings plan isn’t available or if you’ve already maxed out your contributions, the next way to boost your retirement savings is to open an Individual Retirement Account (IRA). Investors have the option between a Traditional IRA or a Roth IRA and a financial advisor can help determine the best investment option for you.

Invest your bonus

There is no easier way to boost your retirement savings than with an unexpected windfall such as a bonus. Of course it’s always nice to have a little extra cash to spend on yourself, but investing in yourself for retirement is a smarter and more responsible financial choice.

Put your tax refund aside

When you invest money that you weren’t expecting – such as a tax refund – you won’t miss it. This makes investing your tax refund for retirement purposes an easy choice. Spending and saving wisely throughout the year with these tax tips can help boost your retirement savings with a tax refund come April.

If you want to start boosting your retirement savings, contact us today to learn how we can help.

 

Brian Littlejohn is the Founder and CEO of Sherwood Investment Management, a fee-only financial advisor firm in Sonoma County, California. Brian is a CERTIFIED FINANCIAL PLANNER(TM) professional who specializes in investment management. He holds a MBA and a Master’s Degree in Financial Analysis. He has over a decade of experience helping clients achieve their financial goals and occasionally teaches investing and financial planning courses as an adjunct professor.

The years leading up to your target retirement date are an important part of your financial plan. This is the time to determine how much income you’ll need during retirement, where that income will come from, and how much more you’ll need to save.

A financial advisor can recommend the best investment strategy for your savings as well as the most tax-efficient way to make withdrawals. It’s no surprise that the foundation of a good retirement plan starts with a budget – because the less you spend, the more you are able to save.

Here are four ways to set a budget before retirement:                             

Track daily and monthly spending

It’s a smart idea to track both your daily and monthly spending when setting a retirement budget. This will account for regular monthly expenses as well as daily splurges and unplanned purchases. Using software such as Mint or You Need a Budget can help make tracking your expenses easier.

Cut unnecessary expenses

Once you start tracking your spending, you’ll be able to identify unnecessary purchases and start to cut them out – or at least reduce them. Getting rid of a credit card or two may help in this regard. If you still have trouble, you may want to consider going to a cash-only system to get the job done.

Continue saving

After you free up some disposable income by tracking spending and cutting unnecessary expenses, you can start increasing your retirement savings. Setting up pre-authorized transfers into your retirement accounts ensures your savings are invested – and not spent elsewhere.

 Get professional advice

According to Marketwatch seeking professional financial advice can have a positive impact on your retirement budget as well as your investment accounts. Partnering with a financial advisor can help you keep track of your monthly expenses and keep you accountable for your retirement budget goals.

Your needs in retirement will differ from your pre-retirement budget needs…sometimes significantly. A financial advisor can help adjust your spending levels to help achieve your retirement goals.

To learn more about creating a budget before retirement or to start setting your retirement goals, contact us today. We are happy to start the conversation and help you make smart retirement plans.

 

Brian Littlejohn is the Founder and CEO of Sherwood Investment Management, a fee-only financial advisor firm in Sonoma County, California. Brian is a CERTIFIED FINANCIAL PLANNER(TM) professional who specializes in investment management. He holds a MBA and a Master’s Degree in Financial Analysis. He has over a decade of experience helping clients achieve their financial goals and occasionally teaches investing and financial planning courses as an adjunct professor.