One Easy Trick to Boost Your Retirement Savings
The Jesse Mecham Show
YNAB
4.7 • 1.1K Ratings
🗓️ 26 June 2023
⏱️ 6 minutes
🧾️ Download transcript
Summary
We all know we need to save for retirement, but it can feel a long ways away. Savings can always wait while you deal with something more urgent, it seems, until all of a sudden retirement starts staring you in the face!
The most important factors in saving for retirement are starting early, and consistency, Ernie reminds us. How do you create consistency? There's an easy trick. If you're not yet, start contributing something -- anything! -- to your retirement accounts now. That amount will be some percentage of your income. Each quarter, increase that percentage of your income you are contributing by 1%. It doesn't seem like much, but it adds up fast! And most importantly, it's a slow enough change that it gives you time to adjust. As one YNAB listener writes in, it doesn't even feel like you're missing the extra money, while at the same time it's encouraging to see your retirement accounts going up.
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Transcript
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| 0:00.0 | Hello, wineappers. My name is Ben with another episode of the wineapp podcast where we teach |
| 0:10.2 | you four rules to help you stop living paycheck to paycheck, get out of debt and save more money. |
| 0:16.5 | I'm here again with my colleague Ernie. We're filling in for Jesse for the summer and we have a |
| 0:22.0 | great topic for you today. I'm going to read an email that Jesse and the budget nerds received |
| 0:27.8 | from Marcy. And if you ever want to write in, you have Ask Jesse at wineapp.com. Otherwise, |
| 0:33.4 | budget nerds at wineapp.com. Dear Jesse, I once heard on a wineapp podcast, maybe yours, |
| 0:40.4 | maybe budget nerds, perhaps both. It was both. Increasing 401k contributions by 1% every quarter |
| 0:48.4 | is a fairly painless way to improve retirement savings. You and or Ernie are so right. |
| 0:56.0 | I'm up to 9% and adjusting nicely. Thank you. Marcy, wine ever since 2018. Absolutely. You heard |
| 1:07.1 | it from both of us. So Jesse is maybe he, I don't know if he's the original one who thought |
| 1:12.8 | did he make this up or is it a, is it out there already? I don't know. We'll say he did. We'll |
| 1:17.9 | give him that credit. Yeah, Jesse made it up. And then I heard that and I was the same, I had the |
| 1:24.2 | same response that Marcy had. This is a really painless way to improve retirement savings because |
| 1:31.0 | I think at the time I might have been at 1%, maybe 3%. And I was in my 30s, mid 30s. So I was like, |
| 1:40.1 | I need to really get going on retirement. So and I didn't have a whole lot of wiggle room in the |
| 1:44.0 | budget. So every quarter, let's just ratchet it up. So I went from 1% to 2, 2 to 3. And by the end |
| 1:50.5 | of the year, I had an increased, my retirement savings by 4%. And so totally agree. |
| 1:56.4 | Huge difference. It was different. Painless. Because at the time, it was maybe a difference of |
| 2:02.0 | 10 to 15 to 20 bucks per month, right? And you stretch that across three different months, |
| 2:07.7 | you're like, you just, you don't feel that. And so I loved that idea. And I've been talking about it, |
| 2:15.9 | you know, months and years since I heard about it. Yeah, it's like about, yeah, you have a place |
| 2:21.6 | you want to get to. And it's really painful. Like if you wanted to go from saving 1% every month of |
... |
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