I’m a Financial Expert: 4 Easy Ways the Middle Class Can Retire With $1M in Savings
For many middle-class Americans, $1 million is still a whole lot of money. With all the bills, monthly mortgages or rent, rising costs of groceries, among so many other expenses — not to mention inflation rates — the idea of saving $1 million in their lifetime seems insurmountably hard.
Find Out: Here’s Exactly How Much Savings You Need To Retire in Your State
Read More: 4 Genius Things All Wealthy People Do With Their Money
Yet, according to a new study by Northwestern Mutual, the average adult in the U.S. said that they expect they’ll need at least $1.46 million to retire comfortably. This number, while already high, still represents a 15% increase from last year’s study and a whopping 53% increase from 2020.
So, how can a person living in today’s middle class possibly save such a large amount of money for their golden years? The good news, according to Kelly Gilbert, owner and principal of EFG Financial, is that even taking simple, common-sense actions can help you create massive savings for your retirement.
GOBankingRates talked to Gilbert to get his advice for how people in the middle class can work to reach that $1 million goal for retirement.
Start Saving Now
You might think that you simply have too many obligations right now to really put your focus on retirement savings. There’s the mortgage. And the car note. Your eldest child’s braces. And, oh yeah, utility bills. Not to mention grocery prices that may make it seem like you need to take out a loan before loading up your cart.
Or you may think you should only be saving toward more pressing milestones, like buying a house or college tuition. However, you’d be wrong. Gilbert said that one of the most important things you can do is to start saving for retirement right now.
“The interest over time earned on your savings can help reach goals so start saving for retirement as soon as possible,” he said.
Gilbert added that you can get resourceful as you figure out ways to jumpstart your savings. For instance, you should take advantage of any employer matches on retirement account contributions.
Be Aware: These 8 Expenses Can Kill Your Retirement — Should You Ditch Them ASAP?
Make Saving Automatic
There’s no greater temptation to start spending — even if it’s on necessities — like seeing that little bit left over in your paycheck after you’ve paid your bills. But before you start planning that vacation or daydreaming about a new car, you should factor in the reality of your retirement savings.
Gilbert suggested alleviating temptation by automatically routing a portion of your paycheck directly to your retirement account. It may be hard to picture the benefits in the short term, but when you’re sitting on your porch — or better, yet, enjoying some time on the beach — in retirement, you’ll thank your younger self.
Cut Spending
Use your retirement savings goals as a reason to take the shears to your spending, and really trim yourself down to only the essentials.
“Review recurring charges in your budget and get rid of any monthly subscriptions and memberships you do not use,” Gilbert said. “If you want to make a nonessential purchase, wait a couple of days before you buy it to determine if it’s a want or a need.”
He added that investigating rewards programs to boost savings for essential items, such as groceries and gas, can also help you increase savings.
Become a Minimalist
Remember Marie Kondo? Turns out, her philosophy of minimalism isn’t just applicable to your living space — it’s also great for your retirement savings account.
Avoiding extravagant or unnecessary purchases is one of the best things you can do for your savings, according to Gilbert. He said that living within your means and sticking to a budget can help you get closer to your retirement goals.
To paraphrase Kondo, ask yourself what will really spark joy — a big luxury car you’ll end up replacing before you retire anyway or the chance to feel secure in a pleasurable retirement.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: I’m a Financial Expert: 4 Easy Ways the Middle Class Can Retire With $1M in Savings