When you envision your retirement what do you see? Do you see yourself living in a house near a beach somewhere? Is it spending more time with your grandchildren? Maybe it’s a lot of golf or sharpening your photography skills. But here’s the not-so-good news. You might not be able to retire at all unless you attack retirement as if you were playing in the Super Bowl.
You need to set a goal
Every NFL teams’ goal is to win the Super Bowl. Similarly, when it comes to saving for retirement your only goal should be to save enough to live comfortably. How much will that be? Many experts say that your retirement income should equal 80% of your preretirement income. For example, if you earned $60,000 the year before you retired, you should have enough saved to generate $48,000 a year. Of course, that’s an ideal. You may not be able to do quite this good but it’s important to have a plan and a goal and to keep working to achieve it
Keep moving forward
You don’t win the Super Bowl all at once. You win it a few yards at a time with the objective of always moving the chains forward. The same is true of saving for retirement. You need to make sure that you’re putting money away every month even if it’s not in big chunks.
It takes more than just a good quarterback
Winning the Super Bowl requires more than just a good quarterback. It takes an entire team. The same is true of planning for retirement. This is true even if you’re a do-it-yourself investor. In this case, your team could be comprised of some very surprising players such as the IRS. This is because the tax code offers benefits through various retirement accounts including 401(k)s, 401(b)s and IRAs. You should then add low-cost mutual fund companies to this, free investment tracking tools and retirement calculators – to assemble a very good team at very little cost.
There is a definite time constraint
Super Bowl football games last just 60 minutes – assuming there’s no overtime. And your retirement planning should be just as finite. Do you want to retire at age 55 or 65 or do you plan on working a bit later? The important thing is to have a timeline so that you can track your progress and know what you have to do to win the retirement game.
You can’t control everything
Coaches whose teams reach the Super Bowl might want to control every aspect of the game but they know it’s not possible. The quarterback could fumble at a crucial moment, the star running back could be injured or a wide receiver could fail to make a critical catch. The same is true of saving for retirement. There are some things that just can’t be controlled. You can’t control inflation, the stock market or the tax code. The important thing is to control the things that you can control. For example, you can control how much you save, how long you work and how you allocate your assets. In other words, you need to accept those things you cannot change but do your best to change the things you can.
It’s not easy but it’s simple
When it comes right down to it football is not complicated. It’s blocking, tackling, throwing and catching. But, of course, that doesn’t make it easy. The same is true of saving for retirement. All you have to do is save 15% of your income then invest it in low-cost index funds and presto! You can retire at age 65. While that sounds simple, it’s not so easy. Just as a Super Bowl football team practices constantly, you need to practice consistently to spend less than you make, invest the difference and ride out any decreases in the market. As the old saying goes, practice makes perfect.
We might all remember that 60-yard pass that resulted in a touchdown in the game’s first quarter. But whether it’s the Super Bowl or saving for retirement, it’s consistency that wins the game. This means consistency in spending modestly and making regular contributions to your retirement accounts. Consistency is the key to having a comfortable retirement in your golden years as it is to winning football games.
You need both a good offense and a good defense
Football teams don’t get to the Super Bowl unless they have both a good offense and defense. The same is true of saving for retirement. You should invest aggressively when you can but then play defense – and invest more conservatively – when times get tough.
Quarterbacks often call audibles when they get to the line of scrimmage and see what the other team’s defense is doing. You need to be just as flexible. Interest rates, inflation and rates of return can be very volatile. Be sure to watch what’s happening and make adjustments accordingly.
It’s not over until it’s over
The Super Bowl isn’t over until it’s over. Teams have actually come from behind and won in the last few seconds. If you’re in your 40s or 50s and behind in your retirement savings or haven’t even started, don’t despair. You will have some hard work ahead just as would a football team that’s three points down with one minute left to play. But it’s still possible to have a decent retirement. The key is to start right now even if you can invest only a small amount of money.
If you have a problem saving money
It can take a fair amount of self-discipline to put money away every month. If you have a problem with this, there are things you could do. For example, you could have an automatic withdrawal made from every paycheck with the money then deposited into a savings or brokerage account. This can make saving easier because it’s totally passive – you don’t have to do anything. If you would like additional tips on saving money consistently, here’s a helpful video.