Retirement Funds not Enough?

I recently read an article by Kathryn Glass where she proclaimed that automated 401K retirement funds will not be enough funds when our generation approaches that retirement age.

Some of this may be common knowledge, but this is one instance where we need to take notice that there is a bit more work that we will have to do on our own to assure that our cash will continue to grow so that we may have a more comfortable retirement. But it is possible that the actions we take today can be very beneficial for those of us that are looking to retire at 65 or even earlier than that. Here are a few of my suggestions:

• Learn to spend less. - If you can cut your expenses today to live off of $800 rather than the $1,000. Your new frugal livelihood will be very beneficial to you in the future.


• Learn to save more – With the previous scenario, by taking that extra $200 in savings and apply it to systems that will make money on top of your money, you're already contributing more to your retirement and it will go a long way.


• OVER contribute to your 401K – For example, my employer will only match 100% of the 6% we put. Though I have aspirations of slowly increasing my 6% to a whopping 10%-12%. The more money saved, the more money earned.


• Start a 401K – There are many people in this world that are not even saving for their retirement, possibly expecting for Social Security to take care of them. Do not rely on Social Security, it will not nearly be enough to provide you with a comfortable living.


• Start an IRA – Start a permanent portfolio or a lazy portfolio and contribute a small amount of cash each month. I prefer dividend paying stocks to where you can reinvest and gain more on your money. The maximum 2008 contribution on an IRA is $5,000 per year, but don't feel obligated to save $5,000. Do what you can afford but be honest with yourself. Remember, be honest because you would only be cheating yourself. In fact, rather than relying on over contribution, you can consider using an extra amount to put into your IRA.


• Start a side business – Have a talent or a service you feel can benefit others while making a possible profit? Why not build a small business out of it? Those extra profits can be a great help towards your long-term savings.


• Consider a second job - If you're not business-oriented, consider a second part-time job and use those extra paychecks to apply towards your savings and retirement.. It doesn't have to be long-term, but it is an excellent way to put some extra funds towards you long-term future.


• Get rid of debt – Debt with interests is only holding you back. It's the reason why I'm dedicating my time and energy to wiping out as much of my debt for the 2008 year. Primarily, student loans, credit cards, car loans, collections, and debts of the sort or loans you want to get off of your conscious immediately. That money spent on loans can be saved towards your future. Get rid of that appreciating debt as soon as possible.


• Save those bonus checks – Regardless if its from work, the IRS, or an inheritance; take that "free" money and invest it towards your future whether it may be paying off a debt or saving it in a savings account or IRA.


• Watch what you spend – You won't know how to save if you don't know where to stop spending. Keep yourself a tracking sheet and at the end of each month analyze your expenses and put forth an effort to work in these areas to ultimately put away cash.