Friday, October 30, 2015

Planning For Your Future - 5 Ways To Save For Retirement

Disclaimer: This post is initiated by Personal Capital; I was not compensated and the opinions, views, and statements given are - unless otherwise declared - exclusively my own!

Here in Germany, one of the demographic groups most endangered by poverty are women 60+; those women, who have oftentimes taken years off their jobs to raise their kids. With the public retirement (and probably Social Security in the U.S.) becoming increasingly unstable, it is up to ourselves to plan for retirement in order to enjoy our lives once we've contributed our part to society.

In general, one can say that it is important to diversify our income once we retire. We cannot solely rely on our retirement we get from the government any more. Private retirement plans, both government-subsidized ones (as available here in Germany) and purely self-funded plans, investment stocks, capital life insurances, and real estate are good pillars to arrange your very own bundle to prepare you for retirement.

When getting started, it is important to analyze how much you are going to need once you're retired; don't forget to factor in inflation, be generous but don't go way over the top. Talking to a personal financial advisor or online tools like Personal Capital's Retirement Planner will help you to determine your financial needs once you hit retirement age.

But even once you determined how much you'd have to save each month to prepare for your retirement, shelling this amount out of your monthly finances every month may be difficult. I remember back in the day when hubby was still in the military and we enjoyed life as DINKs, saving was a piece of cake. This dramatically changed when Lily was born, hubby quit the military, and we were suddenly a family relying on only one income, struggling to make ends meet every month. Saving for retirement was definitely far from my mind while focussing on getting all current bills paid on time. Still, there are ways to shell out some money while staying on top of the monthly bills. Here are some ways you can save money while staying within your budget.

1. Meal planning. I was never much of a planner. I keep my pantry stocked with basics like pasta, rice, potatoes, canned goods, etc. and run out most days to buy the fresh ingredients once I've figured out what we're going to have for dinner. My friend K. is a stark opposite. She carefully plans each week's meals after consulting the weekly ads and sales at the local grocery stores. Adjusting your meal plan buying sale items, using coupons, and buying bulk can definitely save you some dollars off your grocery bill at the end of each week, without you even knowing it.

2. Save the change. The lovely Rachel over at Can't Google Everything had the glorious idea to collect her change in a nicely decorated jar to have spare cash on hand once the holiday season arrives. Why not make a Retirement Fund with the spare change most of us have laying around in odd dishes and nooks all over the house? You may be amazed how much money you collect this way every month if you actually decide to handle more real money rather than swiping your card every time you shop. Handing over bills may also make money more real again, and may make you re-consider whether a second Starbucks of the day is really what you need. Read all about Rachel's great idea here.

3. Don't pay full price. It's always an adventure to go shopping with my friend M. Believe it or not, I rarely see her paying full price on anything - even away from the sales racks. A while ago, we've been out to a store where she was looking for some new cookware. And believe it or not, she talked the salesman into giving her a 10% discount on the skillet if she bought a couple of microwave containers on top of it. I was amazed. Yes, it may take some guts approaching a salesperson with a request like that, and it sure won't work at your general huge retailer, but especially if you make big, necessary purchases you should see if you can get a deal. For example when buying a car, you definitely could negotiate a year's worth of free oil changes or a free inspection. And each dollar saved is a dollar that can go towards your retirement goal.

4. Second-hand bliss. Especially if you have small children, the clothes and toys they outgrow will pile up faster than you think, and most of those are still in very good condition (at least until they hit crawling age, or enjoy ruining every pair of pants they own by sliding down the hallway on their knees). And while donating is definitely a great way of getting rid of the pile all at once, consider sorting out some pieces you could hand it at a second-hand store or sell at a bazaar (very common here in Germany), at a garage sale, or online (Craigslist or special groups on Facebook are good options). And apart from only selling your like-new items, you can also pick up new clothes for your little ones at a fraction of the new price, with the added benefit that most of the chemicals will already have been washed out by the first owner. I admit without shame that most of Calvin's clothes are second-hand, and the girls also frequently get hand-me-downs from a friend of mine who has older twin girls. That way, I have met women who I now regularly trade clothes with, so I also know the homes where the clothes come from. The money earned from these sales plus the money saved from buying second-hand could easily go towards your savings for retirement.

5. Save small but regularly. When we opened our current checking account, we also opened a linked savings account with it and have €25 transferred automatically every month. It's actually our "Oh Crap"-fund, but so far *knock on wood* we didn't have to dig into it, and the small amounts sure add up. Even if you can only shell out $10 every month, that's $120 per year, definitely a start!

Most important, however, is that you start early. Keep retirement in mind, even if it's still 40 years away. Every year you let pass is a year lost. If you have to start small, but start now!


  1. These are great tips especially about saving change, we do that all the time!

    1. I tried, too, but then I kept forgetting to empty my change after about a week.. Well, soon, a new year starts, and I'm going to give it another try!!