There are many different ways to save for retirement, or just to save money in general long before retirement. How can you simplify your finances and maximize your savings? Here are some money saving tips to consider, particularly for retirement planning.
Focus on Paying Off Debts
Many find it difficult to save simply because they have so much debt. Although you should still find ways to set money aside as savings, it’s equally important to budget for reducing debt. For high interest items such as credit cards, be sure to pay more than the minimum amount due. Divert extra funds to the highest interest debt first. As you pay each one off, allocate those payments amounts to the next highest interest account. You should continue to pay the same amount each month even after some accounts are paid off, but change which accounts those funds are going to. You will pay everything off much quicker this way and hopefully have much less debt by the time you retire.
If you have multiple different accounts (such as investment accounts) with monthly or annual fees, consider consolidating them. Not only will you your overall expenses be lower, but fewer accounts will also be easier to manage. For accounts without fees, such as savings and checking accounts, moving them to the same institution and linking them together simplifies your accounts and the energy required to monitor them since you can access them in one place. These types of changes will save both time and money, which are both great to have near retirement.
Downsize Your Home
Are you living in a much larger home than what you currently need? Downsizing could save you money in several different ways:
- Lower Heating and Maintenance Expenses
- Reduced Property Taxes
- Smaller Mortgage Payments
Additionally, if you have equity in your existing home, selling would allow you to access that equity and either reduce your need for a mortgage on the new home, payoff high interest debts, or contribute directly to your retirement savings.
Take Advantage of Employer Matching
Sometimes money saving tips involve finding new sources of money to put towards your savings. If your employer matches 401(k) contributions, it’s like receiving a pay bonus. If possible, contribute up to the maximum amount that they will match. You will essentially double your savings contribution each time!
More Money Saving Tips and Retirement Planning Guidance
As you think about retirement planning, don’t forget to also include estate planning. Many think of estate planning as preparing for your death, but much of it has to do with preserving your assets and reducing your expenses while you are living. Thus retirement planning should include estate planning initiatives. At Simmons & Schiavo, we’re not financial planners but we do work closely with financial professionals to ensure that your retirement and estate plan work together to achieve your ultimate goals both in life and after death. Get started by requesting a consultation with our team.