Retirement planning is something everyone needs to think about, but it can be overwhelming for most of us. Getting a comfortable retirement is often a long journey that takes years of steady work, discipline, and, of course, saving. For most people, it’s not as easy as inheriting a fortune. However, the good news is, it’s definitely worth it. Having enough savings for retirement can give you peace of mind and even help you pass down generational wealth.
Though achieving a rich retirement may not happen overnight, there’s one simple change you can make today that will help you grow your wealth exponentially over the years. It’s not difficult, but it requires a shift in how you manage your money. By making a small adjustment to your habits now, your future self will thank you!
Why People Struggle with Retirement Savings
Navigating adult life doesn’t come with a user manual. We all start on different paths based on our education, goals, upbringing, and even luck. From the moment we enter adulthood, life can be busy and demanding. Whether it’s focusing on building a career, starting a family, or fixing up a new home, there are always distractions that pull us away from thinking about the future.
On top of that, there are often other financial obligations that pop up along the way. Did you go to college? You might have student loans to pay. As your career grows, you might also want to upgrade your car or take a well-deserved vacation. Personally, I’ve learned just how expensive raising children can be, which makes saving for retirement seem even more distant.
With so many immediate concerns on your mind, retirement can feel far away, so it’s easy to push it aside. Unfortunately, the longer we delay saving for retirement, the harder it becomes to catch up.
The Numbers Don’t Lie: People Aren’t Saving Enough
A 2022 survey by the Federal Reserve Board found that households led by someone between the ages of 65 and 74 had a median retirement savings of only $200,000. Financial experts suggest that by the time you’re 67, you should aim to have saved at least 10 times your annual salary. With the median household income in the U.S. being around $80,610 in 2023, that means aiming for about $800,000 in savings.
The reality? Most people don’t have anywhere near that much saved up. And that’s where this simple trick can make all the difference in building your retirement savings over time.
The Simple Trick That Can Change Your Financial Future
Many people fall into the habit of paying everyone else first – bills, daily expenses, lifestyle upgrades – and then saving whatever is left. The problem with this is that, by the time you’ve paid everything else, there’s often nothing left to save.
Here’s where the trick comes in: Pay yourself first. This means taking a portion of every paycheck and putting it into savings or investments before you pay anything else. Treat it like a bill you have to pay. Of course, if you’re struggling to meet basic needs like food or shelter, focus on those first. But as long as you can afford to, making saving a priority can help you grow your wealth over time.
How Much of a Difference Can It Make?
I’m not suggesting you skip all the fun and joy in life. But if you make small, regular contributions to your savings or investment accounts, over time, your portfolio can grow significantly. Let’s take an example based on the average returns of the S&P 500, which have historically been around 10% annually. Here’s a breakdown of how much money you could have by the time you’re 65 if you start investing just $50 per month, depending on when you start:
| Starting Age | Portfolio Value at 65 |
| 20 | $528,542.79 |
| 25 | $318,889.01 |
| 30 | $191,463.84 |
| 35 | $114,016.27 |
| 40 | $66,944.52 |
| 45 | $38,334.85 |
As you can see, even starting with just $50 a month can add up to a significant amount over the decades. The key is to start early and let time and compound interest work in your favor. A person starting their career at 20 and consistently investing just $50 a month would likely have more than twice the savings of the typical American by age 65. However, delaying the start of your savings dramatically reduces your final retirement amount, so the earlier you start, the better.
It’s Never Too Late to Start
If you’re reading this and feel like you’re behind on your savings, don’t worry. While you can’t undo lost time, there’s still time to make up for it. The key is to increase the amount you save moving forward. Even if you didn’t start at 20, paying yourself first and consistently increasing your contributions can still lead to significant growth in your retirement savings over time.
Bonus: The $22,924 Social Security Boost You May Be Missing Out On
Most people are aware of Social Security, but many retirees overlook certain strategies that could increase their benefits. One little-known trick could boost your Social Security payments by as much as $22,924 annually. If you want to make sure you’re maximizing your Social Security benefits, there are easy steps you can take to secure this extra income and make your retirement more comfortable. Click here to learn more about these strategies.
Conclusion: Start Paying Yourself First, No Matter Your Age
Whether you’re just starting your career or you’re in your 40s or 50s, the key to building a secure retirement is simple: Pay yourself first. The earlier you start, the more time your money has to grow. Don’t get discouraged if you’re starting late – you can still make up for lost time by increasing your savings rate and making your future financial security a priority.
By making small, consistent changes today, you can ensure a brighter, more comfortable future tomorrow.
