Roddy Marino, CIMA, Executive Vice President
National Accounts & Distribution
With 39 percent of Americans feeling ill-prepared for retirement, according to the Employee Benefit Research Institute’s 2017 Retirement Confidence Survey, we are often challenged to come up with a solution to make saving easier. Unfortunately, there are no easy solutions, and in the absence of unplanned windfalls, there are no shortcuts. There are, however, strategies that will help you overcome behavioral impediments by infusing discipline into your retirement savings plan. Here are six strategies to consider:
- Automate the process. The best way to make retirement savings a priority is to put it on autopilot, so each time you get paid you save for the future without giving it much conscious thought. If you have an employer-sponsored retirement plan, arrange for a percentage of your pay before taxes to go directly into your retirement account. Also, commit to increasing the percentage you allocate to your retirement account every time you get a raise. The impact of automated savings plans to net pay is often far less than anticipated, and after time it goes somewhat unnoticed. The impact on your nest egg, however, could be quite significant.
- Make it binding. Make your future self a promise to refrain from withdrawing any money from your account before retirement. The best way to protect your retirement account is to establish a separate emergency reserve fund. It is typically recommend setting aside six months’ worth of income to cover unexpected expenses like uncovered medical costs, home repairs, or other unplanned surprises. With an emergency fund, you have a resource to fund whatever immediate needs arise without tapping your retirement account or delaying your savings goals.
- Pay your future self what you paid your creditors. After you’ve cleared an outstanding debt, consider “continuing” those payments by making deposits into your retirement account. For example, if you pay off a car loan that previously cost you $500 a month, allocate that same amount to your retirement account.
- Establish a home for “found” money. It’s not uncommon for someone to view inheritances, tax refunds, and company bonuses as “found money,” and splurge on items they would not otherwise buy. If you receive a windfall or even a little extra, consider allocating the amount into three portions: one for long-term savings goals, one for short-term savings goals, and one to reward yourself.
- Use reward points. Several credit card companies offer specialized cash back programs which convert rewards points into cash deposits into 529 college savings plans, brokerage accounts, or other retirement accounts (e.g., IRAs).
- Get an accountability partner. To increase the likelihood of meeting your retirement savings goals, ask someone to hold your feet to the fire. Your accountability partner should be objective, and unlike a spouse, have no vested interest in daily household financial decisions. Your accountability partner should track your progress, offer encouragement, and continually remind you of your long-term goal. If you are already working with a financial advisor, ask him or her to take an active role in keeping you motivated and engaged in meeting your retirement goals.
As the late Jim Rohn once said, “We must all suffer from one of two pains: the pain of discipline or experience the pain of regret. The difference is discipline weighs ounces while regret weighs tons.” Failing to save enough for retirement comes in as the top financial regret of older Americans. So, if saving for retirement poses a challenge to you today, give some thought to the challenges your future self will face if you don’t take these steps.
For more than 10 years, Brinker Capital Retirement Plan Services has worked with advisors to offer plan sponsors the solutions to help participants reach their retirement goals. When plan sponsors appoint Brinker Capital as the ERISA 3(38) investment manager, this allows them to transfer fiduciary responsibility for the selection and management of their investments so they can focus on the best interests of their employees. This fiduciary responsibility is something that Brinker Capital has acknowledged, in writing, since our founding in 1987.
The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.
 Retirement Confidence Survey 2017, Employee Benefit Research Institute
 Bankrate Financial Security Index Survey, May 17, 2016