9 Tips to Ensure You’ll Have Enough to Retire

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Sooner or later, most of us hope to retire. That day might be decades off, or it could be this year. Either way, you need a good plan to get you from your 9-to-5 job to the promised land of post-work life.

Following are nine tips that can help you accumulate enough to retire when you’re ready to hang up your working shoes.

1. Set a goal for your nest egg

Retirement is just a dream until you put a number on it. As we point out in “9 Ways to Rescue Your Retirement in 2020” you need to have a financial goal in place — and to achieve that goal — before you can retire:

“To fund a nest egg, many investment professionals suggest that people consider saving 10 to 12 times the amount of their last full year of income.

By that logic, if you expect to earn $60,000 in your last full year of work, you should make your goal $600,000 to $720,000. You may not get there, but you’ll be better prepared for retirement than you are now.”

2. Automate your savings

One of the best ways to work toward your goal is to automate your savings. As we suggest in “6 Ways to Heap Up Savings Before You Retire“:

“Have money automatically transferred from a paycheck or checking account into savings. Start with the max you think you can afford. If you guess wrong, you can always reduce the amount later.”

3. Refuse to buy things you don’t need

Vacations are fun, and you shouldn’t skip them. But if you are going away on three major excursions every year, maybe you can trim that number back to just a couple.

Do you really need the fanciest car on the block, or the biggest TV? Never confuse “wants” with “needs.” If you want to retire, you will need to make sacrifices. The sooner you learn this lesson — and begin saving instead of frivolously spending — the more time your wealth will have to compound.

4. Take a little risk and hope for a lot of reward

Yes, the stock market can be a scary place. But history shows that there is no better place to build wealth. The key is to take on just enough risk to make you a little uncomfortable, but not so much that you truly put your retirement at risk. As we say in “7 Mistakes Guaranteed to Ruin Your Retirement“:

“Placing 100% of it in volatile stocks a few years before retirement is a good way to land in the poorhouse. But at the same time, be aggressive enough with allocations to ensure your returns at least outpace inflation.”

5. Keep Uncle Sam’s mitts off your money

One of the best ways to increase your savings is to reduce Uncle Sam’s access to it. So, find ways to lower the impact of taxes on your savings. As we write in “10 Guaranteed Ways to Retire Rich“:

“Traditional retirement accounts let you invest money tax-free now and pay the piper once you make withdrawals in retirement. Meanwhile, Roth IRAs and Roth 401(k)’s tax you now and make the withdrawals tax-free.”

6. Keep expenses down

You cannot control the direction of the stock market, nor can you influence the rates of savings accounts and CDs. The one thing you can do is to control expenses. A 1% difference in fees can cost you tens of thousands of dollars in savings over the course of several decades.

One of the best ways to trim expenses is to invest in low-cost index funds.

7. Avoid making big financial mistakes

A huge financial miscue can quickly put you in a deep hole that will make it much more difficult to retire with a nice-sized nest egg. So, try to avoid mistakes such as buying expensive cars, running up credit card debt or getting divorced.

If these things happen to you, it’s not the end of the world. But the long journey to retirement will likely grow a little longer.

8. Plan to retire to another country

The U.S. is certainly not the cheapest place to live. So, one great way to ensure you will have enough to retire it to plan to live out your golden years someplace where it is more affordable.

For more ideas, check out “10 Countries Where Retirees Can Live Large and Save Big.

9. Stay true to your goal

Remember to stay committed to your goal of retiring in style. Naysayers abound, telling you that you can’t do it or that the universe is arrayed against “little guys and gals” like you.

But that’s just not true. Plenty of people have retired early or paid off massive amounts of debt on relatively modest incomes. So can you.

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