Five rules to retirement savings

Bill Losey, a financial advisor and one of this year’s Forward Thinking Five, outlines five rules to share with your clients to help save for retirement.

1. The Automatic Rule – Start saving money today. Even if it’s only a buck or two each pay period, savings is a habit you must start and stick with for the rest of your life. To improve your chance of savings success, automate the process. Have money withdrawn automatically from your paycheck or directly from your checking account each month. If you don’t want to think about saving, automation can take care of it for you.
2. The 1 Percent Rule – At a minimum save 1 percent of your earnings each payroll period. When you get a salary increase, add an extra percent to your savings and spend the rest. For example, when you get a 3 percent increase at work, save 1 percent and spend the other 2 percent. This way you’ll continually increase your savings rate while enjoying a higher standard of living.
3. The Time Rule – When I meet with people in their 50s and 60s, the one regret they have is that they had wished they’d starting earlier in life. It’s never too early or too late to start saving for retirement. Time is your friend. It can work for you or against you. It’s your choice. Choose wisely.
4. The Spending Rule – The less money you take out, the lower inflation is, the higher return you earn on your money, and the longer it will last.
5. The Most Important Rule – The government and your company will not take care of you. Read, listen and learn about personal finance, investments and strategies. In the end, your financial well-being is your personal responsibility. Control what you can control.