Squirrels have it figured out. This time of year, they are scurrying around the woods behind our house collecting nuts and SAVING them for the future. Winter in Minnesota – where we live – is long and only the good savers will make it through.
The same is true for retirement savers. The ones that save diligently will enjoy a financially worry-free retirement. It is troubling to see articles like this one that say only 20% of American workers max out their 401k plan each year. That’s 28% among boomers, 18% among millennials, and a paltry 16% among gen X. The numbers aren’t much different for IRAs.
I often say that “a dollar saved, takes you a surprising THREE steps toward financial independence”.
Why is that? Here’s how I count the three ways: First, a dollar saved is a dollar you can spend tomorrow; second, it is a dollar that will grow and give you more dollars in the future; and third, by not spending on things you don’t really need, you keep your lifestyle cost one dollar less in the future. That’s it – three dollars for every one saved.
The year’s coming to an end and squirrels need to get busy! Double check your 401k or IRA limits and do your best to get them maxed out now!
Have a great weekend!
Image Credit: Pixabay