Am I Behind in Saving for Retirement?

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By Cristina Wiebelt-Smith, CPA, Wealth Advisor

Am I behind in my retirement savings? Am I where I need to be financially? These are common concerns when people come in to meet with us. I can relate to this concern because there were several years in our mid-30s where we weren’t able to save for retirement like we had planned. Instead, we were paying medical bills for one of our children who had weekly occupational therapy, physical therapy, speech therapy, vision therapy along with seeing a specialized developmental pediatrician.

Many people believe that they are too far behind financially to make a difference. Perhaps they have unexpected expenses, accumulated debt or haven’t started saving for retirement. However, it is never too late to take control of your finances and make positive changes for your future. Here are some steps you can take to start wherever you are financially and improve your financial situation:

1. Assess Your Current Financial Situation:

The first step in taking control of your finances is to assess your current situation. This means examining at your income, expenses, debts and assets. Understanding where you stand financially will help you create a realistic plan for moving forward.

2. Create a Spending Plan:

If you’ve ever gotten halfway through the month and thought, “where did all my money go?” this is a crucial step for you. If you are getting close to retirement, it will be important to have a good handle on your living expenses and your lifestyle. Seeing the numbers on paper or on the screen can help you see if your spending is aligned with your goals, values, and lifestyle.

3. Set some short term and long-term goals.

Write them down and be specific about what the goal is, related costs and how you can reach the goal. It could be paying off debt, saving cash for a vacation or hitting a certain number in your retirement plan. Make sure this aligns with your spending plan.

4. Start Saving for Retirement:

It’s never too late to start saving for retirement. Even if you haven’t started yet, it’s important to begin as soon as possible. Look into your employer’s retirement plan options, such as a 401(k) or IRA. Consider contributing as much as you can, especially if your employer offers a match. Looking back, I wish we had contributed at least a percentage or two of our salaries while also paying our child’s medical expenses.

5. Increase your Retirement Saving:

See if your spending plan can support an additional 1% or 2% more in retirement savings. When you get a raise, try to increase your savings by 1-2%. This can make a big difference over several years.

6. Tackle Debt:

Debt can be overwhelming, but it’s essential to address it to achieve financial stability. Credit card debt can get out of control quickly but making a plan can stop the spiral. Small changes, like making extra payments or paying off high-interest debt first, can make a big difference over time.

7. Seek Professional Help:

If you’re feeling overwhelmed, it may be helpful to seek professional financial advice. A financial advisor can help you create a personalized financial plan, provide guidance on investment strategies, and offer tools and resources to help you move toward your goals. This should be a judgement-free experience. Everyone has a story, and we just want to listen.

Remember, it’s not about perfection; it’s about starting where you are and taking action, no matter how small it is, to improve your financial situation.

By taking action today, you can make a significant impact on your financial future. Giving up retirement savings for a few years may not have been the perfect plan but our child thrived in high school and will start college in the fall, so I would say the imperfection was worth it. Reach out today to schedule a conversation about your retirement savings strategy.

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