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6 Easy Steps to Building a Retirement Fund You Can Count On

Whether you’re just starting out or you’ve been working on your nest egg for years, building a solid retirement account should be a priority no matter where you are in your career.

Why? Few Americans have enough money saved to help them through their retirement years, says finance expert Elyssa Kirkham at Time.

“Most Americans are falling short of the amount of savings required for a comfortable retirement – if they are saving at all,” Kirkham reports.

In fact, a survey conducted by Kirkham and her associates at GoBankingRates discovered one in three Americans have nothing in their retirement accounts.

Those are scary numbers - but it doesn’t have to be that way.

Here are six simple strategies for smart growth you can follow to get ahead and start saving more.

1. Start As Early As You Can

Building savings early on in your career sounds like a no-brainer, but you’d be surprised how few 20-somethings have a “save now” mindset.

According to financial planner Ellen Rogin, that’s partly because it’s difficult for humans to change their perspective on saving and expenses.

Over at NerdWallet, Rogin describes research that found that more people would rather cut back on their expenses - i.e. live on 80% of their income - than save 20% of their income as it comes in.

“Of course, to save 20% of your income is exactly the same as living on 80%, so these results don’t make any logical sense. But it makes intuitive sense because of the way many of us view money,” Rogin explained to NerdWallet.

It’s important to remember that mindset is only one obstacles savers face. Today’s Millennials have more financial obligations to worry about than ever before.

More than 70% of college graduates have at least $28,000 in student debt that hampers their earnings, and cost of living is on the rise, too.

Still, if you’re employed full-time and worried about expenses, socking away between 6% and 10% of your gross income can make a huge impact - especially if those funds are invested in a retirement account.

As compound interest accumulates over time, so will your nest egg. Even if it’s difficult, try putting away $100 a month toward your retirement, until you can afford to increase your contributions. Your efforts will pay off - big time.

2. Take Advantage of Employer Programs

Do you work full-time for an employer that offers matching or other 401(k) programs? Hop on board - STAT.

"That's actually part of your salary, so you should absolutely be taking advantage of that," financial planner Denise Downey told U.S. News & World Report of employer matching.

"If it isn't automatically taken out of your paychecks, it's easy to come up with a reason not to save every month," Downey added.

By contrast, if you’re saving for retirement on your own, you could wind up with significantly less over time - but that doesn’t mean you shouldn’t try.

“For example, let's say you invest only $100 a month for the next 40 years,” imagined Melanie Hicken at CNN.

“With an average annual return of 6%, that modest monthly contribution would grow into nearly $200,000 in four decades,” she added. And that’s better than nothing!

On the hunt for a new job? If your potential employer doesn’t offer retirement matching, then negotiate, say Donna Rosato and Penelope Wang at Time.

“In the absence of [a 401(k)], negotiate higher pay to make up for the missing match. If you face a long waiting period, ask for a signing bonus,” Rosato and Wang advised.

It’s up to you to be the best advocate for your future - no matter what kind of plan your employer offers.

3. Roll Over Accounts If You Switch Jobs

It’s ever more rare for employees to stay with a single employer for their entire career, say Rosato and Wang.

“The average job tenure with the same employer is five years, according to the Bureau of Labor Statistics,” write the financial experts.

“Only half of workers over age 55 have logged 10 or more years with the same company.”

If this job-hopping scenario sounds all too familiar, your retirement savings could take a hit - unless you’re proactive about rolling over your retirement accounts.

Ask the HR department at your new company to help you get started, or open an IRA if you’re saving on your own, suggests Ann Carrns at The New York Times.

But remember - there’s usually a time limit on rolling funds over.

“If you don’t elect to roll the money directly into a new retirement account, [your previous employer] may send you the balance, less 20 percent to pay federal taxes,” writes Carrns.

“You still have 60 days to put the money into a new retirement account, before it is subject to taxes and penalties.”

Given how many employees regularly switch companies, it’s best to have a roll-over strategy in place before you accept that new job offer.

4. Invest - Even If You’re Risk-Averse

The Great Recession left many potential investors nervous about investing in the stock market, especially young people caught in a bad job market after college and Gen Xers whose retirement and savings accounts took the biggest hits.

“Gen X has been hosed,” wealth management expert Patrick Quinn told NerdWallet.

Quinn cites multiple recessions, including economic downturns in the 90s and early 2000s, the bursting of the tech bubble, and stagnant salaries - all of which hurt Gen Xers’ ability to save.

Still, the best way to increase your returns is to invest and take advantage of compound interest, says Walter Updegrave at CNN Money.

“[Your] aim shouldn't be to keep all of your savings safe all of the time,” Updegrave writes.

“Your goal should be to protect some of it from market setbacks, and then invest the rest in a way that balances safety and return so your savings can better sustain you during a retirement that could last 30 or more years.”

Updegrave suggests setting aside a big chunk of money in an emergency savings fund - enough to cover the majority of your living expenses - and investing the rest in a diversified portfolio.

5. Know Your Own Numbers

When you’re stockpiling for retirement as an abstract goal, it can be difficult to gauge how much money you’ll need once you hit 65.

That’s why it’s important to draw up a budget - even if it’s provisional. Budgeting now, according to The Balance’s Dana Anspach, can help you feel less stressed later.

“Getting a handle on your upcoming retirement budget puts you in a place where you’ll be able to make smart choices about the retirement lifestyle you want,” writes Anspach.

“You may find there are trade-offs you are willing to make that might enable you to do things like retire earlier, travel more in retirement, or have more money for fun and hobbies.”

Anticipating your greatest expenses - and how much money you might need above and beyond expected pension or Social Security benefits - can help you build a stronger savings plan.

Time to whip out that calculator and start crunching the numbers!

6. Don’t Draw Early

This might sound like another no-brainer, but it can be tempting for younger investors to draw on their retirement accounts to cover emergency expenses.

According to Carrns, that’s a huge no-no.

“[When] young adults are switching jobs, money is often tight – they may be moving, and need financing for rental deposits and other costs – and it is tempting to withdraw the cash,” Carrns writes at The New York Times.

Not only can you accrue penalties for cashing out early - costing you more money in the long run - but it might be impossible to make your savings back in time for retirement.

Instead, suggests Rodney Brooks at The Washington Post, you should have a special savings account set aside to help with six to 12 months of expenses.

“That fund would be for true emergencies, not things like a vacation, a wedding or an insurance payment,” writes Brooks.

The more cushion you have, the less tempted you’ll be to dip into retirement savings before you hit 65.

Building up savings in the current economic climate is no easy feat. It’s no wonder people take on extra jobs to make additional income.

But with our six simple strategies, you’ll be on your way to saving for the future - even if it’s a little bit at a time.

Do you have a nest egg saved for your retirement? Tell us your saving strategies in the comments below :

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