How to Save for Retirement
As Americans, we have developed somewhat of a mania about retirement. Much of that is due to the fact that people are not prepared:
- The #1 financial regret of older Americans is that they didn’t save for retirement sooner
- The median amount saved for retirement among American families is only $5,000
- And almost a quarter of all Americans are worried they will outlive their retirement savings
But the truth about retirement has been confused – our culture has twisted retirement to be something we “deserve” by the time we reach age 65. There’s a shared attitude that a beach house in Florida should be our reward for all the work we’ve done in our lifetime…but the opposite is true. Work is our reward. In fact, it’s a blessing from the Lord. We know this because God gave work to Adam before sin entered the world, meaning it was always part of God’s plan for His people. It keeps our bodies active, our minds sharp, and increases our lifespan.
On the same token, God’s Word does not prohibit, but rather encourages, saving for retirement. As Christians, we prepare for our later years so that we can take care of ourselves when we are no longer physically able to work full time and to position ourselves to be free to serve full time.
Stewards save because we trust the Lord, not because we trust money. So when it comes to retirement, remember that you are saving to be used by God, not to spend frivolously. Remember that He is “able to make all grace abound to you so that always having all sufficiency in everything, you may have an abundance for every good deed” (2 Corinthians 9:8).
Step 1: Choose A Plan.
There are many different retirement plans, and there is not one “best” plan that is guaranteed to work for everyone, so know your options. It is important to educate yourself and seek wise counsel when considering how to save for retirement.
Like it says in Proverbs 24:3-4, “By wisdom a house is built, and by understanding it is established; and by knowledge the rooms are filled with all precious and pleasant riches.”
Always seek the Lord on your savings strategy, and continue to understand wise savings methods and practices. Don’t allow confusion to intimidate or deter you from starting to save – do your research and ask questions!
Step 2: Start Saving.
Start saving as early as possible, especially if your employer offers a matching contribution to your 401(k) or 403(b). Don’t miss out on “free money”! And if you’re self-employed or don’t have access to an employer-sponsored retirement savings plan, be diligent about creating your own plan and saving early. This blog outlines several different options for you.
To illustrate the difference of starting to save for retirement early, look at this example:
If Sally Sue saves just $200 a month starting at age 20, with an 8% interest rate, she will have over $1 million saved by age 65.
But if Sally Sue waits and saves $200 a month starting at age 40, with the same 8% interest rate, she won’t even have $500,00 by age 65.
This is the perfect example of Proverbs 21:5 – “Steady plodding brings prosperity…”
So remember that when it comes to retirement, time is on your side – start early, diversify your investments, and remember Proverbs 6:6-8– “Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.”
Step 3: Work As Long As Possible.
Since the rules on retirement have changed, consider postponing the age of retirement as late as your health will allow. Plan to always work or volunteer in some capacity after retiring to keep your health.
Many people have actually launched new, or “encore” careers at retirement age since they have more cash, decades of experience, and less risk. Your usefulness and expertise does not decline at age 65, so don’t let anyone deter you from working or fulfilling a lifelong business idea. Seek the Lord’s guidance and enjoy a long, happy life.
Many feel that their credit card debt prevents them from saving for retirement. If that’s you, get it under control now! First, stop using your cards and make a plan to pay them off as soon as possible. Try the debt snowball calculator – it’s easy and FREE! If you need a little more help, Christian Credit Counselors are a great resource. They’ll get you started with a free debt analysis and work with you to pay off your cards quickly and with less interest. They’ve been our trusted partners for years and have a wonderful team of friendly, professional counselors ready to help you.