Saving for Painless Retirement

Saving for Painless Retirement – A Guide for the Financially Innocent

Even though everyone knows the importance of planning for retirement, according to the Federal Reserve, around two-thirds of non-retired adults worry about the adequacy of their retirement savings, and an astonishing 25% have no retirement savings. Even if the statistics shock you, you must appreciate it is never too late to begin saving for retirement. Use this brief guide to get on track:

Set Your Retirement Savings Target

Establishing the savings you need for a happy retirement is complex due to the number of variables involved, like your lifestyle, anticipated medical expenses, retirement age, life expectancy, and more. Experts at the Boston College’s Center for Retirement Research say people should start saving for their retirement as early as 25 years of age by putting aside 15% of their income because a later start will force you to save more, work longer, and reduce expenses. One way of knowing how much to save is to estimate your annual expenses and multiply them by 25. It will allow you to withdraw four percent of your savings every year over 30 years after retiring.

Open a Retirement Account

Even though stock market investments have outperformed savings accounts, they can be trickier to manage. The federal government offers several types of retirement accounts with tax benefits to encourage people to save. The most popular retirement accounts are the 401(k), typically sponsored by employers, and individual retirement accounts (IRAs). Both these plans are available in traditional and Roth options, and you can select one suited to your needs, depending on whether you want the tax break at the time of investing or at the time of withdrawal. A traditional 401(k) may be ideal for the employed, especially if the employer offers to match the contribution. However, depending on where you work or if you are self-employed, you have other plans from which you can choose. It is best to consult a financial advisor to know eligibility and the pros and cons of each. For example, the 2022 limits of contribution to a 401(k) account is $20,500, while for 2023, it is $22,500 for people under 50.

Automate Your Recurring Deposits

To maximize your savings, you should instruct your employer to regularly deduct the specified amount from your salary and deposit it in your retirement account. If you are investing in an individual IRA, you can instruct your bank to do the same, ensuring you do not exceed the limits set by the government. Automating your deposits has two advantages. You do not need to devote time and effort to investing every week or month, and you can also avoid reckless spending says Chiang Rai Times.


Remember that no amount is too small to start saving every month. It is okay if you cannot save 15% of your income, but you should try to keep increasing the amount by 1% to reach your financial goals earlier. You can do it by using a part of your bonuses or raises, tax refunds, or windfall income. Pay off your debts as quickly as possible and use the repayment amounts to save for retirement. Maintaining a check on lifestyle expenses can help significantly to save more.