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- After learning about the FIRE movement, I decided my husband and I needed a better approach to saving for retirement.
- While we want to retire comfortably, we also want to enjoy our lives in the present because you never know how much time you have.
- Now, we increase our retirement savings rate at least once a year. We increase it by a small amount so we don’t feel broke, but enough to make a difference to our savings.
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When I discovered the FIRE (Financial Independence Retire Early) movement several years ago — which motivated me to become debt-free and grow my family’s investment assets — I decided my husband and I needed a way to increase our retirement savings without feeling like we were unable to enjoy our money in the present.
It’s important to me that we plan for our future while still enjoying our life now. My own dad retired early at age 53, but he died from cancer four years later. If anything, this was a lesson in learning to enjoy our life today, and not spend our lives pining for the day when we are officially “retired.”
Setting up our retirement savings strategy
We needed a plan that would allow us to do just that: enjoy life today yet still save enough for tomorrow. We decided that the easiest way to do this was to slowly increase our savings rate each year.
Our original goal was to invest enough in our employee-sponsored retirement plans to get the employer match, at a minimum. When we first started investing in these plans, we were putting around 3% into each.
Within the past few years, we’ve increased that percentage, contributing 6% to a tax-deferred retirement account in 2019. This year, we increased that to 8%.
We also regularly increase the amount of stock we purchase through my husband’s employee stock option program and work to max out our Roth IRAs each year.
Taking baby steps
I’ve found that by automating our savings and budgeting it into our monthly spending, we’re better able to save and invest regularly. And then, by increasing these amounts on a scheduled basis, we’re equipped to meet our long-term financial goals.
This process has shown me that the key to reaching your financial goals is baby steps. By taking a slow, steady approach to saving and investing for retirement, you’re more likely to reach your goals. If you try to take on too much and restrict the amount of money you allow yourself to live on, you may find that you’re less motivated to keep working towards your goals or that you are resentful and self-sabotage your efforts by overspending.
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Increasing your retirement savings by a certain percentage every quarter, six months, or year is a great way to make sure you are meeting your financial goals in the future without feeling pinched in the present.