Retirement is America’s top financial concern. According to a study from Gallup, nearly 60 percent of Americans are worried that they won’t have enough money to retire comfortably.1 Are you a member of that group?
If so, the answer could be as simple as changing your mindset. A new study from Wells Fargo found that those who have a “planning mindset” are 42 percent less likely than those who don’t have a planning mindset to have high levels of financial stress. They also have 3.1 times more in retirement savings.2
How does one develop a planning mindset? Below are a few key steps you can take to change your financial mindset in 2019:
Set short-term goals.
Researchers found that individuals with a planning mindset are in the habit of setting goals. In fact, they’ve typically set a financial goal within the past six months. Have you done that? And have you taken steps to achieve those goals? Were you successful?
If you don’t typically set goals, you may want to get in the habit of doing so. Start with something modest. Pick something that’s achievable but also meaningful. It may be making a regular contribution to a retirement account or paying off a small credit card balance. Once you achieve those small goals, you can move on to something bigger.
Work gradually toward long-term goals.
Short-term goals are helpful, but long-term goals are also important. Individuals with a planning mindset focus on the long-term. Try making your long-term goals as specific as possible. Don’t just say you want to retire. Instead, try to retire with a certain amount of savings by a specific date. You can then work backward to develop a plan to reach that goal.
You also may want to break your long-term goals into manageable pieces. You may find the task of saving for retirement daunting. However, instead of focusing on the total goal, instead set an annual savings goal. By focusing on what you can do today, the goal may seem more realistic and doable.
Save for retirement today.
There’s no time like the present to save for your future. Individuals with a planning mindset know that time is one of their most powerful financial tools. If you contribute money now, you give those funds the opportunity to grow and compound over a long period of time, which can help you accumulate more assets before retirement.
Even a modest contribution is better than nothing. Start by contributing just enough to get your employer match to your 401(k) or employer-sponsored retirement plan. Over time, gradually increase your contributions and also make contributions to an IRA. With compounded growth over a long period of time, you’ll see those contributions start to add up to a significant amount.
Ready to adopt a planning mindset in 2019? Let’s talk about it. Contact us today at DSM Financial. We can help you establish goals and develop an action plan. Let’s connect soon and start the conversation.
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18280 - 2018/11/28