This Is My Biggest Secret to Retirement Saving Success

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I want to make sure I am saving enough for retirement, so I’ve automated my transfers to tax-advantaged accounts. Here’s why you should try this too. 

When it comes to planning for retirement, it’s important to realize that Social Security benefits are only going to replace about 40% of your pre-retirement income. Since most experts suggest that you need to replace about 80% (or more), this means you’ll need a lot of extra money to have a comfortable life once paychecks stop hitting your bank account.

Although saving so much can be a burden, I’m confident I’ll be successful in having a secure retirement. And there’s one simple secret to my retirement savings success.

This is why I’m confident I’ll have a secure retirement

The secret to my retirement savings success is I do not have to do anything at all to be on track for a secure retirement. That’s because I set up a system a long time ago and all I need to do is simply leave it alone.

See, I set up automatic transfers of money to my brokerage account when I get paid. I figured out how much I needed to hit my retirement savings goals using a calculator on Investor.gov that took my retirement timeline and expected rate of return into account. Once I knew that amount, I arranged to have the funds transferred directly to my brokerage firm every single month on the date my pay is deposited.

I also set up automated investing with my brokerage firm to put the money I’m investing into a fund that tracks the S&P 500. On a set schedule, the money that goes into my investment account is used to buy more of a particular investment so I don’t have to try to time the market or even manually remember that I’m making an asset purchase.

As long as I do not change any of these things — which I won’t do, since that would be a lot of hassle and an unsound financial decision — I am going to retire with the money that I need to be financially secure. I am confident of this, given the S&P 500’s long and consistent track record and given the fact that I was conservative in calculating how much I needed to invest in order to build my nest egg.

Get started with automated investing ASAP

Retirement savings can feel complicated. And it can feel impossible if you have to try to limit your spending every month in order to have funds left over to deposit into a brokerage account.

But it really doesn’t have to be. If you remove the money from your bank account for your investments first thing before you ever get a chance to see it or spend it, you won’t become accustomed to having that money. It will just not be an option and you’ll have to structure your spending around what’s left over.

And if you automate both the transfer of funds and your investments, you won’t be tempted to try to engage in risky market timing. You will just allow your money to effortlessly work for you and you won’t have to think or stress about the process. Get started ASAP in doing this so you can take advantage of the power of compound growth, and you’ll set yourself up for great success as a retiree.

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