retirement savingsBefore you roll your eyes at yet another article on retirement savings, take a minute to glance through this and you may be surprised. Yes, you still need to save, but I tried to take a little different approach that may actually help you start saving a little… or saving a little more.

Guilt-free retirement savings advice

Forget the past, at least from a retirement savings perspective. Whether you’ve saved for retirement up to this point is not as important as what you do from today on. So let’s start today. Set up a separate retirement account, schedule automatic payments, and save something – even if it’s just a few dollars a week.

Here are some retirement savings tips linked to age ranges. This is not an exact science, so some advice may fit multiple categories. You’ll want to consider your own unique situation and probably review with a financial planner or CPA.

I’m in my…

20’s. I wish I had started saving more at this age. Did you know that saving about $100 per week now could make you a millionaire by retirement? Live with your parents longer to save more of your income (don’t tell them I told you to). When someone gives you a financial gift, save it. Assume that Social Security won’t be around when you retire. You’re going to have to make it on your own.

30’s. It’s time to stop renting, buy a house, and start building equity. You may even end up paying less each month. It’s also time to max out your 401K at work, at least up to the limit of your employer match – that’s free money. As you start having children, use this same savings approach and open college savings accounts. Just a few dollars a week will cover a large part of college expenses years from now.

40’s. These are probably your peak earning years. If you’re not saving, follow my advice above and set up an automatic payment process through a work 401K, IRA, or other separate retirement account. Remove the money from your income stream and you won’t miss it. You also need to start thinking about life insurance and long-term disability coverage in case of a catastrophic event.

50’s. It’s never too late to save! If you’re the “one” in one-of-two Americans who isn’t saving enough, start with something like $100 per week, or add $100 to what you’re already saving. That’s a no-brainer amount, and you can increase it a little each year. Consider shopping now for long-term care coverage, as it’s often less expensive to buy at this point in your life.

60’s. Now that your kids are (hopefully) finished with college, take a little of that extra money to enjoy life, but save the rest. You can still catch up on your retirement savings goals. If you’ve been saving all along, you may want to start adjusting your investment mix to minimize risk. Your financial planner or CPA can help here as well.

I hope you live to 100!

Living longer can be a blessing as well as a challenge. We get to enjoy more time with family and friends, but our retirement savings will need to cover a longer period of time. This may sound morbid, but you don’t want to outlive your money. Start saving a little (or a little more) today.

If you’re well on your way to or through retirement, please feel free to forward this to other family members and share your own advice for saving. Please share your ideas with us as well.

Neal Bach, CPA