Retirement is designed to be a period in which adults who have worked for decades can relax, enjoy the activities that matter most to them and spend time with family and friends. For millions of Americans, however, amassing enough wealth to live comfortably during retirement is challenging, and many are still working to overcome the financial setbacks that may have resulted from the economic downturn.
Those who are managing credit card debt, trying to stave off housing woes or simply meet their day-to-day needs may not be taking the necessary steps to save for their retirement. This may be because they feel that other financial obligations are more pressing, or believe that they don’t have the income to save effectively. However, a recent survey conducted by the PNC Financial Services Group highlights effective retirement planning tips for those of all income brackets that can help Americans safeguard their golden years and avoid income shortfalls.
Nearly all respondents who are currently on track to meet their retirement savings goals cited some form of financial discipline as a factor in their savings success. For example, 47 percent stressed living within their means as a crucial habit that has allowed them to squeeze more out of their income and devote to savings. Another 46 percent said they have drastically reduced their debt, while 33 percent have overhauled their spending habits. Twenty-three percent paid off their mortgage to free up a sizable percentage of their income.
In addition to being more disciplined about their money management, 72 percent said they contribute as much as possible to their employer-sponsored retirement fund, and 62 percent save in addition to these accounts.
“Clearly, the lesson is: work and save more now while you are in your prime earning years so that you have the option of not working at all during retirement,” said Stephen Pappaterra, head of wealth planning for PNC. “A pattern of making good decisions, planning and sticking to the plan is a theme repeated throughout the survey.”
It’s important to recognize that there are several different actions to take when it comes to planning for retirement. While putting some income away each pay period is necessary to start amassing wealth, it’s equally important to get a handle on unnecessary debt and curb wasteful spending. Individuals who are unsure how to begin planning for retirement should consider consulting a credit counselor or financial adviser to develop a savings and debt management program.