No Regrets Retirement

November 11, 2018

Tomorrow’s Success May Depend On How You Budget Today

What do people ready to retire say about how they’ve saved?

  • More than 80% wish they could talk to their younger selves to tell them to save more.
  • Nearly six out of ten admit that not saving for retirement was one of the biggest mistakes of their lives.
  • Many reflect on simple budgeting changes that could have helped them save more.1
Table showing how much it would cost you to make the minimum payment on your credit card.

Rewrite Your Future

If you make adjustments to how you handle finances today, you’ll be less likely to look back on your “savings” years with regret. Learn from the experience of others, and use some basic budgeting strategies to help you  stay on track.

Save For The Unexpected

Nothing derails your finances more than having an unexpected expense wreak havoc on your budget. With today’s uncertainty about jobs and markets, it’s a good idea to save enough money to cover your living expenses for three to six months.

One way to build up your emergency fund is to free up money by paying off high-interest debt (see below). Or, you can cut other corners like choosing home-cooked meals over eating out, or movie night at home versus the theater.

Pay Off High-Interest Debt

If you have high interest debt, there’s a good chance you’re spending more than you make. This could mean a lifestyle change for you, such as waiting to buy what you want until you’ve saved that amount, over buying an item with a credit card.

In reality, buying something you don’t have cash for could end up costing double the original cost or what it’s worth. The high-interest rates you pay each month are likely keeping you from getting ahead financially.

Put Windfalls To Work

Many people see a work bonus or their tax return as   play money. Instead, consider putting extra money to work for your future—like paying down credit card debt, funding your emergency nest egg or investing in your retirement. Even if you save or invest only a portion of extra money, it’ll get you closer to your long-term goals. Plus, once your finances are in order, you can save for vacations and shopping trips and enjoy them even more.

Save It vs Spend It

See the impact investing an additional amount each month could mean for your retirement savings.

Table showing the impact investing an additional amount each month could mean for your retirement savings at different amounts from $25 - $200 each month.
Source: American Century Investments Time-Value Calculator. Chart assumes no specific portfolio with 6% returns over 20 years.
This hypothetical situation contains assumptions that are intended for illustrative purposes only and are not representative of the performance of any security. There is no assurance similar results can be achieved, and this information should not be relied upon as a specific recommendation to buy or sell securities.

The Bottom Line

Getting your financial house in order is not only important for your peace of mind today; it can also make a difference in how you face your future — with confidence or regret.

1 American Century Investments Pre-Retiree Survey, 2013

This material is provided with permission from American Century. It is for informational purposes only and has been obtained from sources believed to be reliable. While every effort is made to ensure the accuracy of its contents, it should not be relied upon as being tax, legal, or financial advice.

American Century Investment Services, Inc., Distributor
©American Century Proprietary Holdings, Inc. All rights reserved.

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