{"id":7143,"date":"2013-11-11T15:21:23","date_gmt":"2013-11-11T23:21:23","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=7143"},"modified":"2016-12-21T07:28:19","modified_gmt":"2016-12-21T15:28:19","slug":"retirement-savings-power-thinking-small","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/retirement-savings-power-thinking-small\/","title":{"rendered":"Retirement Savings: The Power Of Thinking Small"},"content":{"rendered":"

When it comes to\u00a0retirement\u00a0savings most people would benefit from bit of \u00a0Chinese philosophy. It was Lao Tzu who said,\u00a0\u201cThe journey of a thousand miles begins with a single step.\u201d<\/p>\n

You often hear this aphorism other ways: Today is the first day of the rest of your life. Put one foot in front of the other. Just do it.<\/p>\n

All of which are variations on the theme of time and effort. You might see some long-term goals as too large to contemplate, too audacious to consider \u2014 even a goal as important as building up\u00a0retirement savings<\/a>.<\/p>\n

Yet any long-term goal can be broken down into smaller, incremental goals that are much less scary. You can lose 20 pounds, if you make a pound a month your goal. \u00a0You can drink eight glasses of water a day, if you start your day with at least one and then drink water instead of coffee or soda at meals.<\/p>\n

\"retirement<\/a><\/p>\n

And you can retire on time with plenty of money in your\u00a0retirement plan<\/a>\u00a0if you take that first, crucial step. Here are some ways to ditch the inertia:<\/p>\n

1. Join your company 401k<\/strong><\/p>\n

Nearly half of working Americans (45%) have no 401k and no\u00a0IRA retirement account<\/a>\u00a0savings. They simply don’t participate. Employers increasingly push workers into 401k plans automatically, which is a help. While the fees on smaller 401k plans are onerous, putting money in does reduce taxes today. And anyone can open a\u00a0self-directed IRA<\/a>.<\/p>\n

Make a point of joining your plan, even if it’s only at the minimum level to get any free company matching funds. You can increase it later.<\/p>\n

2. Set a short-term cushion goal<\/strong><\/p>\n

Sound financial management revolves around controlling surprises. You do that by controlling cash flow. Aim for a cushion of at least a month’s pay in a savings (not checking) account. Once you make it, increase the number to three months by setting up automatic deductions from your paycheck.<\/p>\n

3. Always bank windfalls<\/strong><\/p>\n

Never, ever spend pennies from heaven. Open a Roth IRA account and bank any tax refunds, tax-free inheritance distributions and bonuses from work. Money you don’t expect should always be added to\u00a0long-term\u00a0retirement\u00a0savings<\/a>.<\/p>\n

4. Don’t count on windfalls<\/strong><\/p>\n

Windfalls should not substitute for regular saving. \u00a0Think of your\u00a0401k, IRA and other automated savings<\/a>\u00a0as the solid engine of your plan and any unexpected checks as a lottery ticket that paid off \u2014 and brought your\u00a0retirement\u00a0date that many days or weeks closer.<\/p>\n

5. Invest early and compound<\/strong><\/p>\n

Time is money \u2014 literally. Every dollar you save today is worth $2 in a decade, then $4 a decade later, then $8 after 10 years more. Regular saving and\u00a0compounding<\/a>\u00a0is how retirements are built, not through tricky stock trading or \u00a0blind luck.<\/p>\n","protected":false},"excerpt":{"rendered":"

When it comes to\u00a0retirement\u00a0savings most people would benefit from bit of \u00a0Chinese philosophy. It was Lao Tzu who said,\u00a0\u201cThe journey of a thousand miles begins with a single step.\u201d You … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":7144,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[8],"tags":[42,43,37,54,55,53,56],"yoast_head":"\nRetirement Savings: The Power Of Thinking Small | MarketRiders<\/title>\n<meta name=\"description\" content=\"When it comes to retirement savings most people would benefit from bit of Chinese philosophy: "The journey of a thousand miles begins with a single step.\u201d\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.marketriders.com\/investing\/retirement-savings-power-thinking-small\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" 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