No matter how old you are, it’s always a good idea to plan for your retirement. 22 and fresh out of college? You’d be smart to open an IRA, even if you can only contribute a few bucks a month to it. That’s because of the power of compound interest. As your money grows, the new total is the base that your interest rate applies to. So, over longer periods of time, your money will snowball into larger and larger sums.

The question for many, however, is how to actually get started saving for retirement. Between bills, loan payments, rent, and childcare, it’s often hard enough just to get by – let alone seriously plan ahead for the future. It may seem impossible, but with the right strategy, saving for retirement can be a real possibility.

Start by budgeting

The first and most important part of any retirement planning strategy is a budget that allows you to save. Without a solid budget, it can be hard to know where all your money goes. You look at your bank statement or credit card bill at the end of the month and scratch your head wondering how you possibly could have spent that much.

Tracking your spending and budgeting go hand in hand, and you’ll need to focus on both if you want to build a healthy retirement savings. Not sure where to start? Try out the 50/20/30 budget. It’s simple, easy to remember, and very effective. Here’s how it works.

  1. 50% of your income can be spent on necessities. That includes rent, groceries, gas to get to work, and childcare and schooling. Basically, the bare bones that make life work.
  2. 20% of your income should be put into savings. If you want to break it down further, you can put 10% toward retirement, and 10% toward an emergency savings.
  3. 30% of your income can be spent on whatever you like! Baseball games, trendy shoes, commissions from your favorite artist – whatever floats your boat is fair game.

Make sure you’re diligent about categorizing and tracking your various expenses, so you always know where your money is going, and you can correct course if you see you’re overspending in one area.

Consider your assets

Another part of retirement planning is considering what assets you have at your disposal. This likely applies more to those later in their careers, as young upstart professionals don’t usually own property, significant stock holdings, or other assets. If you do own financially significant assets, however, these can factor into your retirement planning portfolio. How so? Consider these options:

  • If you own a home but your retirement savings is a little less than ideal, you may have the option to downsize or take out a reverse mortgage loan. If you’re not sure how those work, see this informative article to have a reverse mortgage explained.
  • If you’re younger, don’t be afraid to start considering how any possible inheritance may factor into your retirement plans. If your parents own a house that they plan on passing on to you, that could be a significant boost to your assets, for instance. They’re difficult conversations to have, but they’re worth having, especially if you plan on starting a family of your own.
  • If you have an investment portfolio that isn’t intended for something specific (like a wedding or a down payment on a house), this can also factor into your retirement plans.

Not everyone is fortunate enough to have access to assets that are useful in retirement planning. For those that do, they can be grateful to factor them into their plans. For those that don’t, they may need to be more careful and purposeful about budgeting.

Know where to make sacrifices

Lastly, no matter your savings profile or asset portfolio, chances are that you will need to make some sacrifices in order to fully plan for retirement. Maybe it’s not taking the longer, more expensive version of the vacation you’d planned. Maybe it’s working a little more overtime to pay down your debt so you can really focus on saving.

Whatever sacrifice you have to make, know that it’s worth it in the long run. Too many Americans come to the ends of their careers without enough – or anything at all – saved for retirement. Don’t let that be you. With the right planning, retirement can be comfortable and enjoyable.

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