Want to do a better job of saving for retirement? Develop habits that are common to those who received the best scores in a survey by Vova Financial about retirement preparedness. The best savers not only give “a great deal” of thought about their retirement, they also take action.

Some of the actions they take and that you can use to increase your retirement readiness:

Create a budget

This is the first step to controlling your spending and increasing your savings. Yet many people fail to take this important step. The survey found that only 19% of those who didn’t have much saved for retirement had a budget, while 65% of the best savers did have a budget.

Put the maximum in your retirement plan at work

Definitely you should contribute enough to the retirement plan to receive your employer’s match. This one step insures you will have a 100% return on your money. If you can, contribute more to increase your retirement savings. The survey found that the best savers “were twice as likely to contribute the maximum amount to their workplace retirement plan” than those who scored the lowest as savers.

Calculate how much income you will need in retirement from your retirement savings

If you already use a budget, you know how much income you need each month. After you retire, some of your expenses may go down, such as clothing and transportation, while others may go up, such as vacations. Once you make those adjustments, go to www.ssa.gov (the Social Security Administration website) and calculate your retirement benefits. Subtract your Social Security benefit amount from your budget to determine what income you will need from your retirement savings. Remember to consider income taxes in your calculation.

Take advantage of financial education at your workplace

Many employers offer financial wellness programs for their employees. If your employer does not, ask if they would consider it or take advantage of free programs through your local community college.

Buy life insurance

The best retirement savers in the Vova survey had at least enough life insurance to cover debts and final expenses. This simple action can protect the surviving spouse from being burdened by a debt load, thus helping ensure that the retirement savings will last through the surviving spouse’s lifetime.

Talk to a financial advisor

The findings in the survey show that more than 50% of the best savers utilized the services of a financial advisor while only 7% of the worst savers did.

Talk with your spouse about your retirement expectations

Talking about your retirement dreams and goals before retirement can help ease disagreements later. Folks who have these discussions and use the joint retirement expectations in their retirement planning and saving feel more prepared for retirement.

No matter what your age, the time to plan for your retirement is now. The longer you save, the better your chances of being able to reach your retirement goals. Yet, even if retirement is close, planning now still is your best bet to achieve your dreams.

Source: Tom Anderson on ETCNBC.com March 30, 2015

Judith Ackland has more than 26 years of experience in accountancy and financial planning, including seventeen years as a CFO of a diverse business. She started Crystal Financial in 2010 to help a wide array of individuals, families, and business owners better understand their finances and how good financial management could help them achieve their goals. Judith has an MA in Professional Accountancy from the University of Nebraska at Lincoln as well as a Certified Public Accountant Certificate and a Certified Financial Planner designation.

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