Think about this: on average you have 45 years of working life to save up for 30 years of retired life.
While you are working, it can be hard to save because you have bills to pay; utilities, groceries, gasoline, insurance, property taxes, day-to-day living expenses. You will have all those same bills to pay when you are retired, however they will be more expensive due to inflation. So you need to save now to pay for those bills that you will have later, all while paying your current bills. It can seem overwhelming!
When faced with a large task, the best way to accomplish it is to just get started one small step at a time. A friend of mine, Jim Blankenship, CFP®, EA a financial advisor in New Berlin, IL, came up with the idea of asking financial bloggers all over the country to write blog posts encouraging people to increase their savings rate by 1% in their employer sponsored retirement plans, such as 401(k)s, 403(b)s, or Thrift Savings plans. Earlier in the year I was quoted in a US News and World Report article about 401(k) retirement accounts, and one piece of advice I gave was to increase your contribution rate by 1% each year, so when I heard Jim’s plan, I knew immediately that I wanted to participate.
So far there are thirteen articles with ideas that can help you increase your savings rate by 1% in your retirement account:
From Jim Blankenship: Add Your First 1% to Your 401(k)
My Contribution: Employer Retirement Accounts: 2013 Contribution Limits
From Roger Wohlner: Need Post-Election Financial Advice? Try the 1% Solution
From Sterling Raskie: A Nifty Little Trick to Increase Savings
From Robert Wasilewski: Increase Savings Rate by 1%
From Mike Piper: Investing Blog Roundup: Saving 1% More
From Theresa Chen Wan: Saving for Retirement: The 1% Challenge for 2013
From Steve Stewart: Seriously. What’s 1 percent gonna do?
From Ann Minnium: Gifts That Matter
From Alan Moore: Financial Challenge – Should You Choose To Accept It
From Jonathan White: Ways to increase your retirement contributions 1% in 2013
From Emily Guy Birken: Increase your savings rate by 1%
After reading these posts hopefully you know why it makes sense to increase your savings rate, and have some good tips for where to find the money in order to allow you to increase your savings by 1%. The next step is to take action, and this is the season to do so. This is the time of year that HR departments are having their annual meetings about benefits. Commit to yourself and your family’s future financial security and increase your contribution by 1% this year!