Tips to save money for your retirement plan
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Retirement is inevitable. You cannot deny it and it will come sooner than you think. Having a retirement plan and saving money for your retirement should be your most important part of financial planning. It is in your best interest to save money to live comfortably after retirement.
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And if you want to have retirement before your retirement age, you have to save a larger amount of money to adjust the money you will need to live a comfortable life.
If you think that you don’t have enough money and is barely able to make both ends make and you cannot save money then you are wrong. Saving even small amounts of money will let you save big amounts in the long run.
Why you should start retirement savings now
Whatever your age is and whatever your financial situation is, start saving for your retirement now. Retirement is not far away. Years pass so fast. If you will be like me, you will regret why you didn’t save for your retirement early. But the best time is now. It doesn’t matter if you are 20, 30 or 40 something. Just start it now. You still have time to build your retirement income.
1. Social security will not be enough
Social security or pensions you will get after retirement will only supplement your retirement savings it cannot be your main retirement money. You never know, what will be the amount allocated by the government for social security at that time. You cannot rely on social security only. Better start saving for your retirement now.
2. Medical bills
Medicare will not be able to take care of all your medical needs. You may need to pay for your medical bills yourself. Why not get ready for it now and save money for your retirement. Government is cutting funding in many areas. We never know when it would be time to cut funding for medical needs.
3. Fluctuations in the economy
There is always this point as there are always fluctuations in inflation and the economy. The economy may shrink and govt can cut all the social security. What if you will not have any retirement fund. you will not be able to live without a paycheck.
How to save for your retirement fund
Retirement planning is as important as planning for other phases of life. You will not have a steady paycheck after retirement. It is in your best interest to save as much as you can in your earning years. Creating a retirement plan is an absolute necessity and you cannot deny it if you want to live a comfortable life after retirement.
Pay yourself first
Yes please do a favour and pay yourself before making any other purchase or payment. This will give you ample amount of money in the long run that you will not even know.
Start saving small
If you think that you cannot save big chunks of money, start with very small amounts. Say you only have 25 dollars to save. Save this and automate these savings. Gradually you will be able to invest this saved amount in some bigger investments.
Automate your savings
This is a very crucial point to make your retirement plan a success. While it is important to live life and enjoy, saving should be an important part of your life. And it is best to automate your savings because you may forget to save or there can be other obligations where you want to put your money. More important, have an automated plan where you will get penalized for not saving or withdrawing your money.
Earn more to save more
If you feel like your present income is only enough for your basic needs, start earning more. There was no better time to earn some extra bucks if you want to make money. Start some side hustles to make extra money. You can put this money into your retirement plan.
There are other ways to make money online. Start with these apps and survey sites.
Save money from your grocery and shopping
If you have a good amount of money to save , just save it. But planning is required by everyone. If you are on a tight budget, it becomes important to squeeze out money from everywhere to save and invest. Saving money from your already tight budget is such an important task. Try to squeeze out some money from your grocery shopping. Shop online and save some cashback. Whatever you save, you can save into your retirement plan.
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Saving money in low performing accounts is not the only way to build your retirement funds. It is important to invest in high yielding accounts. If you are afraid of investing money, start with small amounts. Raiz gives you that opportunity to invest money from your behalf. It is an app that could invest change from your shopping. If you shop for a few dollars then this app will round it up to full digit and invest the change for you.
If you are young and have some time to bear the loss of money then you can invest in stocks. Stocks can give you better returns.
If you have less time for retirement, invest in more secure places like bonds.
Take control of your super
Super in Australia is equivalent to 401K in America. It will be a good amount of your retirement income so it is a good idea to take control of it and see how much you can contribute to super.
Here is your Super calculator. Calculate your super and have an idea of how much you need to invest in super to have a good retirement fund.
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These are my thoughts on saving money for retirement. Please tell me in comments how you are saving money for retirement. If you like the post please share. I will appreciate this.