10 and 20 dollar bills on table

4 Smart Ways to Save Money for Retirement


There are a million places you would rather be than sitting in your office cubicle, so why aren’t you saving for retirement so that you can finally give your notice and enter a life of leisure? You might not be able to retire at 30, but starting at a young age is the best choice for making sure you can support yourself after you’re done working. If you’re behind in the game, don’t worry. There are plenty of ways to catch up. Start making your money work for you with these four tips.

Split Your Retirement Savings With Your Pay Raise

If your boss offers you a 4 percent raise that comes out to an additional $150 per month, you might be tempted to spend more on evenings out or take a nice vacation. However, smart savers will split the raise and increase their retirement savings by 2 percent so that they see only an additional $75 in their paycheck. There’s no reason to feel like you’re missing out on the other 2 percent — you’ve never had it before, and you’ll still enjoy the additional savings bump.

If you follow this method whenever you get a pay raise — ideally, once a year — then soon you’ll be saving 5–8 percent monthly without even realizing it.

Look for Waste in Your Spending Habits

The key to saving for retirement is prioritizing your spending habits. In some families, this may mean cutting back on your cable package so that you can save $50 per month. Other households can try cooking a few more nights per week instead of eating out — or choosing water instead of alcohol when they do eat out. It doesn’t matter what you cut so long as you make saving for retirement a priority.

Ideally, this spending analysis will help identify waste that should have been cut anyway. Are you still paying for a gym membership that you haven’t used in three months? Reducing this waste is an easy way to find retirement savings without cutting back.

Download Apps That Get You Cash

One of the biggest challenges people have when saving for retirement is finding extra money to put away. If your entire budget is set aside for rent, groceries, and clothes, then it’s hard to find extra cash to move into your IRA. If you’re looking for easy ways to save, consider downloading a few of these apps on your smartphone to start earning money while you continuing your normal activities of daily life.

Foap lets users sell their photos for $10, splitting the proceeds 50/50 with the app maker; all you have to do is upload your photos right from your smartphone. (For owners of a Galaxy S7, this is where Samsung’s advanced camera technology comes in handy.) Ibotta rewards you for shopping for groceries and other essential items if you scan a receipt and buy certain items. Spending just $1 on bananas will give you $0.25 back. This adds up, and your rebates can be redeemed for cash and gift cards. Soon you’ll have the extra cash you need to save a little each month.

Analyze Your Risk Willingness and Investments

Most employees opt for the standard package that their employer offers, investing wherever they’re told to. While your employer isn’t necessarily giving you bad advice, your employer might also choose a safer option than you need. Many financial advisors will analyze your risk analysis by asking how quickly you’re looking to grow your money and how important your savings is to you. A young person has less to lose from his or her savings and can afford to take more risks when investing than can someone who will be living off his or her investment in a few years.

Consider meeting with a financial advisor or your human resources department’s retirement advisor to talk about your goals and what you hope to see in your growth. You might be put on a faster path to growing your money than is possible through the standard plan.

A few dollars can add up quickly, and following these tips can help you set aside $20, $50, or even $500 dollars per month for retirement without placing a significant financial burden on your family. Even if you have to cut back now, it will be worth it when you leave your office cubicle for good.

Image via Flickr by frankieleon

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