When you have a precise retirement savings number you’d like to achieve, it takes dedication and consistent investing to get there.
Luckily, Americans have confidence that they’ll achieve their retirement goals. Three in four workers (73%) believe they can fully retire with a comfortable lifestyle, according to the November 2021 Transamerica Institute Retirement Survey of Workers. In fact, 24% say they are “very confident” that they’ll likely meet their retirement goals and 49% say they are “somewhat confident.” Full-time workers (75%) say they’ll more likely retire comfortably compared to part-time workers (62%).
Being confident enough to hit your goal is a great thing. But what might you need to do if you want to hit your retirement savings goal early? (As in, before you hit “regular” retirement age — 66 years and two months for those born in 1955 and 67 for those born in 1960 and after.)
Let’s find out what you can do to get this goal underway in 2022.
How to Hit Your Retirement Savings Goal Early
Let’s walk through some tips you can use to realize your retirement savings dreams earlier than you imagined.
Tip 1: Determine what you want to do in retirement.
What do you want to do as a retiree? If you’re content in your current house with your pets and plan to do activities close to home for the duration of your retirement, you might need less money in retirement than, say, someone who plans to circumnavigate the earth a minimum of five times.
Many individuals look forward to traveling as part of their major retirement plans. In fact, 65% plan to travel. The Transamerica survey also found that would-be retirees have an interest in the following activities:
- Spending time with family and friends: 59%
- Pursuing hobbies: 51%
- Pursuing paid work: 38%
- Starting a business: 20%
- Pursuing an encore career: 17%
- Continuing to work in the same field: 14%
- Volunteering: 26%
- Taking care of grandchildren: 21%
It’s important to decide what you want to do in retirement so you have a figure to work toward. If you don’t have any idea, you may never meet your goal.
So, what is the full figure you decide you’ll need to save? Have that in mind and work backward from there. If you don’t do this from the get-go, it’s like trying to hit an archery target wearing a blindfold.
Tip 2: Take a look at your savings rate.
Many of us didn’t save aggressively early in life, starting with our first jobs at 16.
However, you can still pick up your savings rate and retire early. Many experts suggest saving 15% of your salary. However, to hit your retirement savings goal early, you may need to pick up the pace. (Especially if you …….