For many workers, retirement can't come soon enough. You may be counting down the days until you can leave your job and start living life on your own terms, traveling or spending time with family -- or simply relaxing.
However, many workers also end up needing to work longer than they'd like. Roughly half of baby boomers have no retirement savings at all, according to a report from the Insured Retirement Institute, and one-third of boomers say they don't expect to retire until at least age 70 -- if they ever retire at all.
If you want to keep working in retirement, there's nothing wrong with that. But if you're forced to work longer than you'd like because you can't afford to leave your job, that could put a damper on your retirement plans. By making a few simple lifestyle changes, however, you can get into the habit of saving more money so you can retire sooner.
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1. Consistently increase your retirement account contribution rate
One of the easiest ways to save for retirement is to set up automatic contributions, so that a set amount of money goes straight from your paycheck or bank account to your retirement fund every week or month. This makes saving effortless, because you don't have to think about it. However, it is important to check in on your savings regularly and increase the amount you're contributing.
There's no exact formula as to how much you should save or how often you should increase your contribution rate, but aim to boost your savings rate at least once a year, or whenever you get a bonus or raise.
Also, you don't have to boost your contribution rate significantly to see your savings spike. Even if you can only save an extra $10 or $20 per month, that adds up to hundreds of dollars per year. And if you're able to increase your savings by that rate year after year, your retirement fund will grow exponentially.
2. Track your spending and cut back wherever you can
If you're not tracking your spending, it's tough to get a clear picture of exactly where all your money is going. And when you don't know where all your money is going, it's challenging to figure out if you're overspending, and where you can cut back.
Tracking your spending doesn't have to involve complex spreadsheets and calculators. In fact, there are several apps that can manage your money for you, even breaking your expenses down into different categories to make it easier for you to see all your costs in one place. From there, you can set spending limits and goals for yourself so you can save a little more each month.
Be sure to be consistent when tracking your expenses, too. Try your best to stick to your spending limits every month, and if you notice any patterns -- like if you consistently overspend on the weekends, or when you're out with friends -- be especially diligent about keeping your spending in check during those times. After a while, tracking your spending will become second nature, and it will feel like more of a healthy lifestyle habit than a tedious task.
3. Keep an eye on your long-term retirement goal
When retirement is still decades away, you may be tempted to focus more on the short-term goal of saving a little each month. But it's just as important to think about your long-term goals, because that can help you determine whether you're doing enough right now to reach them.
Especially when it comes to saving for retirement, if your savings are off track, it's much easier to correct the problem when you catch it early. If you wait until you're 5 years away from retirement to realize you're hundreds of thousands of dollars short of reaching your saving goal, there's not much you can do at that point.
Every year or two, take some time to think about your retirement goals. Consider factors like the age you'd like to retire, how much you think you'll spend each year in retirement, and how long you estimate you'll live. All of these things will impact how much you need to save, so if any of these goals change, you'll need to adjust your retirement plan.
Next, throw all this information into a retirement calculator to see how much you should aim to save. Even if you've already done this, it's a good idea to recalculate your retirement number every year or two to make sure you're still saving enough. If your results show that you should be saving more each month than you currently are, that's a sign that you're falling behind. The earlier you can make adjustments and start saving more, the better shot you have at retiring when you want.
If your goal is to retire sooner rather than later, you'll need to supercharge your savings to ensure your money will last the rest of your life. Fortunately, you don't have to win the lottery or inherit a fortune to do that. By integrating a few healthy financial habits into your lifestyle, you can save more and increase your chances of enjoying an early retirement.
