Four Ways To Save Ten Thousand Dollars Per Year For Your Retirement

If you’re like most Americans, you’d like to save more money for your retirement. According to the Federal Reserve’s “Report on the Economic Well-Being of U.S. Households in 2019,” 60% of Americans either do not realize if they’re on track or are unsure if they’re on track. No matter where you are on your retirement journey, it’s better to start saving now than to start saving down the line. Any amount you save is better than no amount, and for many people picking a round number, like $10,000 a year, feels like a good goal. While $10,000 a year may also feel daunting, you can break it down into smaller and more attainable steps.

When you break down $10,000 a year into monthly savings, it becomes $833.33 per month. If it’s less daunting to think of that via your pay periods, most people have 52 pay periods per year, so it would be $192.30 per pay period. Or, if you want to get down to the brass tacks, $10,000 broken down to 365 days is $27.40 per day. Here are a few ways you can increase your savings to meet your $10,000 per year goal for your retirement.

Automate Your Savings

Sometimes, half the battle is just saving your money in the first place – and you can fight that battle by automating your savings. By automating your savings, be it through an automatic deposit into your 401k, or automatic transfers into a savings account, that money is gone before it even gets a chance to be spent by other means. Of course, in order to be sure you have enough to both automate your savings and to live day to day you have to…

Budget

Budgeting can feel boring and many people avoid it, but it’s necessary to understand where you money is coming in from and going out each month so that you know exactly how much you can put toward your retirement. When you have a budget (and it doesn’t have to be a line by line, detailed budget either) you can determine exactly how much you’ll have left over to put toward that $10,000 retirement goal. And, if you’re falling short of that goal, you can see why – perhaps you’re overspending, or you may need to increase your income.

Cut Back Spending

Cutting your spending is one thing that no one wants to do – and no, cutting out a Starbucks
SBUX
once in awhile won’t suddenly make you $10,000 richer at the end of the year. However, there are steps you can take that will add up in your budget, and some can help significantly. Comb through the subscriptions that you pay for, and cancel the ones you aren’t using – then take that money and automate it to your retirement savings account. You may have multiple streaming services but really only use one – here’s a spot where you can likely not even feel the pain of cancelling them, but reap the savings. Take a look at your insurance and see if you can get a better deal with what your coverage and payment is, and then take the difference and keep paying it into your retirement. Do the same by evaluating your taxes with a tax professional.

Increase Your Income

The other half of the equation to saving more for retirement is increasing how much money you’re bringing in. If you’re due for a raise at work, ask for it. If you’re consistently underpaid, perhaps it’s time to look for another job. If you have valuable skills that you can utilize, use them (consulting on the side, starting a side business, etc.) or think outside the box and think about how you might declutter your home and use those yard sale proceeds to pad your retirement account. Don’t forget about employer matches for your 401(k) – those are funds that you don’t want to leave out of your retirement equation.

Combining these four techniques may help you to ultimately reach your savings goals – and if not, don’t fret. Any amount you save toward your retirement is better than not saving at all. If you’re struggling with retirement planning, working with a financial advisor may be useful so that you can come up with a solid plan for your personal situation and finances.