The financial crisis, global market turmoil, and the loss of retirement funds by many hard-working investors has done little to impact the sentiment of Americans regarding retirement savings.
A survey completed last year by the Society of Actuaries revealed that the opinion of pre-retirees has not changed much since 2007 – one-third of participants said that retirement and retirement saving did not apply to them –not because they didn’t feel it was important, but rather, because they saw saving for retirement impossible and felt they would still need to be working past the age of 65.
The partners of Fogel Neale see retirement planning as essential to an enjoyable and comfortable lifestyle after years in the workforce, no matter what the specific investment goals of an individual may be. However, we recognize the fears that people face and reasons behind procrastination of retirement preparation – there are countless reasons, all of them real and valid. The majority of our clients are working affluents – they often come to us with issues such as “How much of my income do I need to put away for my retirement?” or “I am so busy trying to reach my financial goals right now, I don’t have the time to worry about later.” Our response is this: live more simply with the eye on life after working.
Living simply may seem to be easier said than done, especially when the real rewards are presented years down the road. But there are many ways that investors can make retirement attainable and much less daunting, without having to sacrifice the most prized standards of living, such as a nice home for your family or a relaxing vacation in Bermuda. Retirement can be a reality, even before the age of 65.
We have put together some ideas for investors to consider over the next couple of months that will assist in simplifying the retirement saving process. By cutting down on minor costs here and there that don’t impact your overall lifestyle, you can invest the money you have saved in a retirement fund for you and your family.
1. Kill two birds with one stone – participate in the green movement and cut energy costs. Start by installing compact fluorescent light bulbs, which have a longer lifespan and consume less electric energy. Installing a programmable thermostat allows you to significantly reduce overuse of air conditioning while you are out of the house during the hot summer months. Another way to pare down the electric bill would be to unplug electrical devices that are not used on a regular basis
2. While entertainment may be a crucial aspect of your life, it is important to take an inventory of costs and identify which can be discarded. For instance, some may have an extremely costly membership to a local country club, but only visit once or twice a year – this is a form of entertainment that can be eliminated without any real impact on overall life enjoyment. Another expensive item is a gym membership – consider downgrading to a less expensive venue or running outside in the summer months. If you don’t visit at least 2-3 times per week, it’s probably safe to say that there are other, more cost-efficient methods of obtaining physical exercise.
3. Insurance – it is important to be prepared for unexpected misfortunes, but many do not revisit their insurance plans each year to cut down on unnecessary costs. Ask your employer about options regarding premiums. Maybe it is possible to downgrade. Be sure to shop around for homeowner and auto insurance. With good credit, it is feasible that you will find reasonable quotes at a number of insurers. Choosing the best rate out of many will ultimately save you money. Another option that will cut costs is to switch to term life insurance rather than staying under a whole or universal plan. Re-evaluation of your insurance needs and costs overall will help you to save money now, in order to improve your life in retirement.
These are just a few ways to cut costs and still enjoy life now while saving for your future. Speak with a financial planner or wealth manager to further evaluate areas to cut costs and ways to invest your savings in a better tomorrow. As always, we are here to address any questions you may have, or to hear about interesting ways you’ve found to cut costs.