Aug 9: BEST FROM THE BLOGOSPHERE
August 9, 2021
Could a change in mindset help boost your retirement savings?
An interesting article in Entrepreneur magazine suggests a change in mindset can help GenXers augment their retirement nest eggs.
The article starts out by making the target for retirement savings clear.
“GenXers, did you know that experts say you need to have saved a whopping six times your income for retirement by the time you’re 50? If you were born between 1965-1980 (41-56 years old), you’re at that age or close to it,” the article begins.
“In other words, if you make $50,000 per year, you need to have at least $300,000 saved. If you make $150,000 per year, you need to have at least $900,000 saved,” we are warned.
That’s a lot of money – so what happens if we don’t get there?
Plenty, the article cautions.
You’ll face a “rising cost of living” without savings, the article states. The article – aimed at a U.S. audience – talks about healthcare costs, here in Canada that would refer to things like long-term care. Without enough savings, “you may have to work longer,” government pensions probably won’t cover all your costs, and you may “end up selling something,” like your home.
Bottom line is that “you may have to accept a lower quality of life” without retirement savings, Entrepreneur concludes.
But there’s a cure, and it is a simple one – reinvent your mindset, the article advises.
“When you start thinking about ways to save for retirement all the time, it can make a huge difference in how much you ultimately do save,” the article suggests.
Having the drive and determination to do something will make you unstoppable, the article urges. So “get laser focused” and “dig into grit.” This latter idea means having “courage, conscientiousness, perseverance, resilience and passion for something,” the article explains.
So if you just can’t find a few dollars to save each month, Entrepreneur suggests getting “a side hustle” of some sort. Even $10 here and there can add up over time, we are told. Be sure (again, this is a U.S. piece) to maximize your contributions as much as possible to savings programs like a registered retirement savings plan (RRSP) or tax-free savings account (TFSA).
Be prepared to work longer if you have to. This will also allow you to delay your government retirement benefits and collect more, later. Look at downsizing to save money, and budget “like crazy.”
“Do anything (within reason) that you have to do to get your retirement savings because you are laser-focused,” the article concludes.
Save with SPP has been a retirement saver since age 25, when we first learned about RRSPs. Some suggestions we can add to the good advice in Entrepreneur is that every little bit adds up over time. If you took all the “free money” you get from winning on a scratch ticket, returning cans and bottles, getting cash back on a credit card or income tax refunds and put it into savings, it will add up to a tidy sum over time.
Saskatchewan Pension Plan members know that they have contribution flexibility. If you want to contribute a set amount each payday, no problem – set up an automatic withdrawal from your account. If you want to put in bits and pieces of savings now and then, perhaps all you need to do is set up SPP as a bill on your banking website. SPP will take that cash, invest it, and help you turn it into retirement income down the road. Be sure to check out SPP today!
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Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.