Many Americans worry that they are not contributing enough to their retirement savings to stop working completely. The Employee Benefit Research Institute’s 2012 Retirement Confidence Survey reveals that only about 14 percent of workers are very confident they will have enough money to live comfortably in retirement.
One way to ease your concern about your savings rate is to check your numbers against a retirement planning calculator.
Regardless of your age, you can reduce your expenses and contribute the extra cash to your retirement account.
Cut costs to boost retirement savings
Try these five ways to reduce your expenses.
- Pay off expensive debt. It is one of the best moves you can make toward your future financial stability. If you pay down (or pay off) your credit card debt and make extra payments toward your mortgage, you may be able to retire debt-free or lower your income needs in retirement.
- Compare investment fees. Check to make sure you are on track to meet your investment goals without overpaying in management fees.
- Evaluate your housing costs. Depending on your circumstances, you may be paying more than you should for your home. Consider downsizing and investing the extra money.
- Compare earnings on your savings. If you are keeping more than six to nine months’ of expenses in a money market account certificate of deposit or CD, you may want to move some of that cash into an investment with the potential for a higher rate of return. For your emergency savings, compare money market account and CD interest rates with our rates survey to see if you are earning the maximum interest.
- Try a “no-spending” month. It can be challenging to eliminate all unnecessary spending for 30 days, including restaurant meals and gifts, but this method can provide a quick boost.
Regardless of which method works for you, the important message is to make retirement savings your priority.