Retirement experts share 6 steps to help you make saving a priority
Posted: February 24, 2020 | Word Count: 520
If you’re like most people, you worry about finances. In fact, nearly six in 10 American workers say that financial matters are the source of more stress than anything else in their lives. The best way to reduce this worry and gain confidence in your financial future is by taking proactive steps today.
In honor of America Saves Week, the experts at Prudential Retirement share six steps to make saving a priority in 2020 and beyond.
One of the best ways to build long-term savings is doing it automatically and letting the balance accumulate over time. Employer-sponsored retirement plans can help make saving easier by automatically deducting a regular amount from your paycheck before taxes.
Save with a plan
Did you know that one in five Americans aren’t saving any money for retirement or other financial goals? Consider enrolling in your workplace retirement plan if you aren't already. You can save automatically and start with any amount you're comfortable saving (even just 1%). But remember: many employers offer a company match, so it’s wise to contribute enough to receive it. If not, you’re leaving free money on the table.
Save for the unexpected
More than half of Americans struggle to meet basic financial obligations, and four out of 10 have trouble paying an unexpected $400 bill. That's why it's important to have an emergency savings account. Employers recognize this is a growing challenge for their workers, and many companies offer tools and resources to help their employees save for the short-term. Ask your HR department about what kinds of solutions they may have to help you.
Save to retire
Whether you start small or contribute the maximum allowed, the sooner you save for retirement the better. Once you start saving, plan to increase your contribution as your paycheck grows by at least 1% per year. What's more, diversifying your investments, staying invested for the long-term and avoiding hardship withdrawals from your retirement account can help your savings grow over time.
Save by reducing debt
Household debt climbed to almost $14 trillion in 2019, and it’s impacting the average person’s ability to save. Small efforts done regularly, such as paying more than the minimum due, can have a big impact on reducing your debt. Additionally, if you’re struggling with debt and daily expenses, talk to your employer or a financial advisor. There are tools that can help put you on a better path to financial wellness, including budget coaching and debt management services.
Save as a family
As caregivers, it's important to talk to your children about saving. Discussing saving with young children and throughout their growing years builds confidence and can help them develop good savings habits that will last a lifetime. Set goals as a family and work toward them together. Remember, you are your child's best role model, so if you make saving a priority, they are more likely to follow your lead.
This is being provided for informational and educational purposes. Since individual circumstances vary, contact a financial professional to address your personal circumstances.
© 2020 The Prudential Insurance Company of America, Newark, NJ.