The new year brings reflection and reassessment and, although a big list of New Year’s resolutions can be difficult to keep, it is worthwhile making and keeping just one solid change each year.
Here are five changes that will move you toward a better future. Think where you would be now if you had acted on even one of these resolutions 10 years ago. Make one or all of these moves now, and thank yourself heartily in a few years!
1. Boost your retirement savings 1 percent a year
Can you picture yourself saving 20 or 30 percent of your salary toward retirement? I know, right? It sounds radical.
Yet, when you consider the losses you could suffer from a volatile stock market, our growing lifespans and the potential shrinkage (or even loss) of Social Security in years to come, the only guarantee against old-age poverty is to save about 30 percent of your earnings and invest it conservatively, some retirement experts are saying.
Ten years ago, if you’d started adding a measly 1 percent a year to your retirement savings, just $25 more out of each $2,500 paycheck, today your contribution would be 10 percent higher. If you were saving 10 percent in 2006, you’d be at 20 percent. If you were deducting 15 percent toward retirement, you’d be saving 25 percent by now, solidifying a safe future in retirement or maybe even a chance at early retirement.
Here’s how to get started:
- Divert money before you see it: Sign up for automatic payroll deductions so the money never reaches your checking account, derailing any temptation to spend it. If your employer doesn’t offer automatic deductions, your bank will let you automatically divert a set amount into savings monthly. (If not, find a new bank).
- Automate your increases: Some workplace retirement plans let you choose to automatically bump up your savings each year, which makes the dent in your paycheck scarcely noticeable. If you don’t have this feature at work, muster your resolve and do it yourself, raising your retirement contribution by 1 percent each January.
- Run the numbers: Say you earn $80,000 a year. At a 10 percent annual savings rate, you put $8,000 before taxes into a 401(k) each year. If you’d bumped your savings rate by a half percent a year for a decade, to 15 percent, you’d be putting away $12,000 a year today. If you’d pushed your rate up by 1 percent, you’d be saving $16,000 a year now, doubling your contribution in 10 years. Experiment with your own numbers using several online retirement calculators. These are not precision instruments, so try several to get a rough idea.
- Money Talks News founder Stacy Johnson has a simple formula for investing retirement savings.
- If you’re stressing about having enough to retire, read “6 Ways to Ensure Enough Money For Retirement“
- And if you are “Behind on Retirement Savings? Here’s What to Do“
2. Drop your defenses
Maybe you needed your weapons when you were younger. Life is rough, after all, and many kids get kicked around in families and by peers while they’re too young to escape. So, we’ll give you that.
But defensiveness – the impulse to meet every challenge with an attack – robs us of the chance to hear information we need. It cheats us of the chance to hear what friends, colleagues and loved ones want from us. That, in turn, robs us of chances to grow, to succeed and to make more and deeper connections. In other words, defenses protect us from life. If you’d been listening 10 years ago who knows how much richer your life would be today.
Here’s how to do it:
When someone asks you to listen, just do it. No arguing (nope, not even in your head). No counter-attacking. You don’t have to agree. Or respond. Just say you’ll think it over. You’ve got your own grievances, no doubt. Save them for later, for when it’s your turn to be heard.