From
Your Perspective:
Retirement catch-up for late starters
Trim expenses
Another way to help reach your
retirement goals is to spend less — both now
and during retirement. Even the small choices you make
every day — for instance, taking your lunch into
work four days a week — can help you set aside
more money for your future goals.
By looking closely at your spending habits, you’ll probably see ways to
make cuts now to save more for the future. For instance, you might consider:
Dining
out less
Keeping
your car longer
Decreasing
your life insurance once your children are grown
Paying
down credit card balances or transferring to
a low-rate card
Raising
home and car insurance deductibles
Saving even small
amounts regularly can make a difference, as you can see by comparing
the pretax value of the following three hypothetical investment accounts
after 20 years. Each account earns 8% annually and compounds quarterly:
Monthly
investment
$50
$100
$200
Value
of account after 20 years
$29,647
$59,294
$118,588
You might also consider
modifying your lifestyle during retirement to decrease expenses. For
instance, you might think about trading down to a smaller house, relocating
to a place with a lower cost of living, or trimming your leisure costs.
