Everyone knows they should be saving for retirement. But not everyone knows how they should be saving for retirement. Why is it important to save strategically? As prices rise and people live longer, those heading into retirement need to have a large cushion. According to Fox Business, “Financial experts now advise saving enough to finance at least 25 years of retirement, which may require $2 million or more. Most people aren’t coming anywhere close to saving that much.” So what do you do? Save money, invest regularly, and invest more aggressively. Here are a few suggestions to get you on the path to a comfortable retirement.
1. Don’t rely on a savings account
“If you feel that the only safe place for your money is in a bank, you’re actually taking a great risk because inflation erodes the purchasing power of your money. Although many people contribute to retirement accounts, they never invest beyond that, sticking with what they perceive to be the safest option in order to avoid loss,” writes Nerd Wallet. If you have savings, invest it. It will appreciate over time and at least keep pace with inflation, or even better, grow at a greater rate than inflation. None of that will happen if you just have your money sitting in savings.