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Saving money along the road to retirement

With summer nearing its end, I hope you’ve had a chance to do something that leaves you Feelin’ Good Again.

For many, that includes travel. The distance traveled is irrelevant, it’s seeing and experiencing something new that makes one come alive.

The recent, long weekend was a chance for my husband and me to celebrate our 15-year Gringo Honeymoon. Out of concern the state of Texas had been abandoned, we decided to counterbalance the exodus by visiting San Antonio.

In August??!?! Yes, oddly enough, we headed down That Dusty Trail, in August. What better way to understand why Southwest Colorado attracts so many tourists? Let’s just say, 101 degrees with 80% humidity makes you say, I’m Comin’ Home.

In truth, studying tourist migration was not our primary reason for going. The name will be unfamiliar to some, but others may have listened to Robert Earl Keen’s music at some point over the past 41 years. Last weekend, he played his final show at John T. Floore’s Country Store.

Between traveling and seeing a favorite musician wrap up a decadeslong career, I couldn’t help but think about retirement.

Depending on your stage of life, retirement may be anywhere from a lifetime away to one you are fully embracing. And while it may seem like it’s a long way off, think back 10 years. Time does fly.

To actualize your daydreams of retirement, you’ll wish to start planning now. Rule No. 1, it’s never too early, or late, to save for this phase of life.

The average American will spend 20 years in retirement and needs about 70% to 90% of their pre-retirement income to maintain their standard of living. Do the math and you’ll understand rule No. 1. Err on the side of 90% if you dream big.

There are many Shades of Gray when it comes to retirement plans. One underused resource is a defined contribution plan, frequently offered by private employers. In this retirement plan, the employee and/or the employer contribute a designated amount of money, each pay period, to a retirement saving plan such as a 401(K).

Having money deducted from a paycheck, pretax, is an easy way to save money over time. Automatic deductions don’t feel like money out of pocket. The savings are out of sight, out of mind – safe from coming Undone.

Plus, when money is contributed as a percentage of your income, you’ll save more on the pretax value than on post-tax. Over time, it adds up.

If you haven’t already, ask your employer if it offers retirement plans. Decide how much you could live on each month, then sign up and save.

Living paycheck to paycheck is a reality for many. And, your employer may not offer a retirement benefit. Under these circumstances, saving may feel impossible.

This month, track your spending for as many days as possible. List everything you buy and the cost.

At the end of the month, Think It Over One Time: What did you need to buy vs. want to buy? What was purchased unnecessarily? How might you lower the cost of things you need to buy?

These unrealized savings, which you’ve been living without, are now the start of your retirement. For more details, visit the U.S. Department of Labor, “Savings Fitness.”

Now, I’ve saved the best for last. While the inappropriately capitalized words throughout may appear to be in error, they are a sprinkling of some of REK’s best songs. May the sounds of music fill you with pleasure on a trip when the Road Goes On Forever.

Nicole Clark is the family and consumer science agent for the La Plata County Extension Office. Reach her at nicole.clark@colostate.edu or 382-6461.