Break Through Retirement Barriers with These Smart Financial Strategies
Why Most Americans Struggle with Retirement Planning
Joe Anderson and Big Al opened the discussion with a sobering stat: 77% of people don’t have a written retirement plan. Only 21% have one on paper, while the rest rely on mental plans—or no plans at all. Their recommendation? Start with the basics. Calculate your net worth by subtracting liabilities from assets, evaluate your monthly cash flow, and begin saving—even if it’s just $50 per month.
Automate Your Savings Early
Starting early gives your money time to grow, and automating your savings ensures consistency. Set up recurring transfers to your 401(k), IRA, or savings account. Joe and Big Al emphasize the concept of “paying yourself first” to prioritize future stability over short-term indulgence.
Understanding Market Behavior and Diversification
Markets fluctuate. A 15% drop within a five-year period is normal. Joe and Big Al stressed diversification—spreading money across cash, stocks, bonds, and alternative assets—tailored to your timeline and goals. This cushions your portfolio against volatility and avoids emotional, fear-based decisions.
Build an Emergency Fund and Tackle Debt
They recommend saving enough to cover 3–6 months of living expenses in an emergency fund. When it comes to debt, consider balance transfers, consolidation, or negotiating with lenders. Use the avalanche method (highest interest rate first) or snowball method (smallest balance first) to stay motivated and make progress.
Smart Moves for Childcare and Health Costs
Childcare costs can consume up to 27% of a family’s income. Consider a Flexible Spending Account (FSA), which allows $5,000 in tax-free savings. You might also qualify for up to $1,050 per dependent through the child care tax credit. For health expenses, Health Savings Accounts (HSAs) offer another tax-advantaged strategy, with contribution limits of $4,150 for individuals and $8,300 for families in 2024.
Managing Student Loan Debt
Federal student loan debt averages $40,000. Joe and Big Al highlighted income-driven repayment plans as a helpful option. They also pointed out that employers can provide up to $5,250 in tax-free assistance toward your student loans—a benefit more companies are starting to offer.
Boosting Retirement Savings with Catch-Up Contributions
If you’re over 50, take advantage of catch-up contributions: an additional $7,500 for 401(k)s and $1,000 for IRAs. Beginning in 2025, those limits will increase. Redirecting bonuses, tax refunds, or raises into your retirement accounts can accelerate your savings without changing your lifestyle.
The Overspending Trap
Even though 80% of people say they have a budget, most don’t stick to it. Joe and Big Al suggest using budgeting apps, tracking discretionary expenses, and distinguishing between needs and wants. Overspending during retirement—on travel, luxury vehicles, or home renovations—can shorten the lifespan of your savings.
Plan for a Longer Retirement Than You Expect
Americans are living longer—up to 87 years for women and 85 for men by 2050. Many people plan to work into their late 60s, but early retirement often becomes necessary due to health or employment issues. Trimming your budget by just 10% could stretch your savings by five years.
Get Personalized Help with the Financial Blueprint
To make all of this easier, Joe and Big Al recommend using the free “financial blueprint” tool available on the Your Money Your Wealth website. It shows whether you’re on track and what to change if you’re not. With the right tools, a few smart habits, and consistent effort, you can break through retirement barriers and create long-term financial freedom.
Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.
IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.
• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
