According to a recent a report by Bankrate, 20 percent of Americans are not saving for their day-to day lives, let alone retirement. This, despite the fact unemployment is low and wages are increasing. With so many workers failing to set aside cash, many will face shortfalls of operational cash in the event of an unexpected crisis or retirement.
In fact, CNBC reports that half of all Americans will not be able to maintain their standard of living once they stop working. In fact, over 40 percent of Americans are said to have saved less than $10,000 for their retirement, which is approximately 12 percent of what they would need to survive. These dismal statistics point to a rough retirement to retirement for nearly half of all Americans.
The good news is that you don’t have to end up in the bottom half of this equation. Regardless of how much or how little you currently save, what matters is that you start to plan. That’s all it takes to change the trajectory of your retirement life. Proactively examine how you are spending and saving and commit to changing your course. The earlier you begin, the better.
Estate Planning for Retirement
Financial advisors recommend Americans learn to live beneath their means. That translates into saving more money than you currently do:
- Track your spending habits for 30 days.
- Use the data to create a realistic budget.
- Set aside a standard amount for fluid expenditures (such as groceries, restaurants, clothing, gasoline and auto maintenance should. If you fail to do this, your entire check could be eaten up by flexible spending.
- Create a simple two-columned sheet of paper to note budgeted and actual expenditures so you can monitor your progress.
Typical categories to reduce include; cable TV, mobile phone plans, groceries, entertainment, gym memberships, clothing and dining out.- Start asking, “Is this a need or a want?”
- If something is a need, figure out if you can negotiate a better deal.
- Think of how much money you can save, instead of spending every penny or going in the red.
- Consolidate non-essential debt and pay it off, completely.
- Double check insurance rates.
- Do not purchase flight insurance, extended warranties or disease insurance.
- Eliminate automatic payments attached to your banking accounts. (Most people forget just how many companies withdraw money from their personal account each month.)
- Consider downsizing. Profit left over from downsizing should immediately go into savings or a financial investment vehicle to provide and protect you during your senior years.
By following these simple steps, you will not only experience financial peace during your own lifetime but you will have more to share with your loved ones. When it comes to planning what you want to leave to your heirs, contact our office. We can help you set up an estate plan that keeps your kids and grandkids out of probate. But if you ever have need of probate, we could help with that, as well.
About Skvarna Law: Estate Planning, Elder Law, Probate, Trusts, and Wills
Skvarna Law Firm operates offices in Glendora and Upland, California and provides legal services for individuals living in San Bernardino, Los Angeles, Orange and Riverside Counties. This includes the cities of Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Montclair, Pomona, La Verne, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
