For most of us, a comfortable retirement was the ultimate dream — the pot of gold at the end of a rainbow marking a long, and hopefully happy, career. Unfortunately, the reality today feels much harsher. That pot of gold that would have sustained our golden years has either lost its glow, or it feels like it’s been raided.
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If you feel like it’s harder than ever to save for retirement, you’re hardly alone. According to a recent CNBC survey, 82% of workers say that achieving a comfortable retirement is “much harder or somewhat harder” than it was for their parents’ generation. Contributing factors include the decline of traditional pensions, the higher cost of living — from groceries to education to healthcare — and longer life expectancies.
Those are some daunting facts. But there are ways you can work toward a brighter future and start adding to your own pot of gold.
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Between the rising costs of, well, everything — plus outstanding debts and loans, especially student loans — it can be hard to keep track of your expenses, let alone save for retirement. Around 47% of Gen Xers and 52% of Millennials who responded to the CNBC survey said that the burden of paying off loans or debts is the top reason why their retirement savings aren’t where they want them to be.
Not to mention the allure of the latest I’ll-never-know-when-I-need-it gizmo from TikTok shop. By the time you’ve paid your debts and treated yourself, you may find yourself staring at a reduced bank account and little progress toward retirement. If you find yourself in that position, it’s time to take a cold hard look at your financial goals.
Tracking your expenses to see where you can cut or reduce costs is a great first step. For the next leap forward, focus on paying down high-interest debt, like credit cards, to free up more cash to save. And remember this classic piece of financial advice: pad your emergency fund. Having a solid financial cushion to handle unexpected expenses will keep you from cracking the safe to your retirement too early.
No person is an island. That’s true in life and in finance. Figuring out which expenses to cut, how to prioritize saving, or even which retirement accounts are best for you can be hard. Fortunately, you don’t have to do it alone.
The right financial advisor can help you prioritize retirement along with your other financial goals and stay on track. Reach out to friends and family to see if they have an advisor they trust. But remember, as with any relationship worth developing, you’ll want to make sure you feel comfortable with the advisor’s approach and advice. Meet with advisors until you find someone whose expertise and communication style work well for you.
Whether you work with a financial advisor or get started on your own, exploring tax-advantaged accounts is one of the most significant actions you can take. If you work a standard 9-to-5 job, you likely have access to a 401(k) or 403(b); if you’re self-employed, look into a solo 401(k).
Regardless of how you set up your 401(k), there are some steps you can take to maximize its potential — and your future. Try to increase the percentage you contribute each year, with the goal of contributing at least enough to receive your employer’s full match.
Roth IRAs are another popular retirement savings account, for good reason. They let you invest after-tax dollars, which can grow tax-free over time. During retirement, when you withdraw from your Roth IRA, all that growth comes back to you tax-free. It’s a powerful financial tool for retirement planning since you don’t have to guess how taxes will impact withdrawals.
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If you’re fearful that you’ll reach the end of your career only to find your pot of gold tipped over and tumbleweeds rolling out of it, take heart. There are some simple steps you can take now to brighten your outlook. Partnering with the right financial advisor, tracking your expenses, and exploring tax-advantaged savings options are all smart ways to begin.
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This article originally appeared on GOBankingRates.com: You’re Right — It’s Harder Than Ever to Save for Retirement. Here Are 3 Steps to Get Ahead
