It’s no secret that most people are finding it hard to save money in these tough economic times. Or that many are too overwhelmed with day-to-day and month-to-month issues to even think about saving for retirement. Yet with just a few slight — and pretty much painless — life alterations, the majority of Americans can add to their retirement savings, and be a lot better off in their later years than they imagine.

For example, did you know that taking the money you spend on one cup of coffee a day and investing it in a 401(k) plan can add up to well over $150,000 in 30 years? Renting a movie from the library instead of going to your local theatre each week — at an average cost of $30.00 when figuring in the price of gas and movie refreshments — could turn into nearly $300,000 over three decades if properly invested. And there are many other areas where just a minor trim in spending delivers a major payoff during your retirement years.

There are also numerous ways to save extra mony that can then be utilized for investing. If you’re in line for a raise, consider stashing a large portion of it in a retirement account. Just finished paying off your car? Then keep making the payment “to yourself” by putting the same amount aside every month for your future. Maybe there’s an extra room in your home that could be rented out, with the after-expense total being designated for your “golden years”. From turning an unused treadmill or bread machine into dollars at a yard sale or on e-Bay to cutting back a little — like eating out one or two times less each month — you’ll be surprised at how much you can accumulate in savings for your retirement.

Of course, one of the best methods of ensuring the continuance of your desired lifestyle in later years is a tax-deferred retirement plan. According to Peter Macaluso,  vice-president of FM International Services (NY), Ltd., one of America’s most respected retirement plan providers, better known as FMi, “many companies make such a plan available to their employees. It allows employees to defer a portion of their salary toward their retirement, and offers a variety of investment options.”

Equally important, contributing to a retirement plan where you work provides additional benefits, including pre-tax savings and deferred tax payments. Depending on existing economic conditions and prevailing interest rates, these plans can double your investment in just seven to ten years. A young man or woman who begins contributing less than $40 a week at age 30 can retire at 65 with a little over $400,000 in his or her plan account. Which is why it makes sense to allot as much as possible while gainfully employed.


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“I recommend to my clients that they increase their 401(k) retirement plan contribution by one percent if they can do so comfortably,” says Macaluso, “unless, of course, they’re already contributing the maximum allowed by the IRS. In the vast majority of cases, it’s a relatively small amount that won’t be missed, but will grow into a sizable sum they’ll be very glad to have down the road.”

As with any financial planning, Macaluso believes diversity in investing is always the smarter move. “Don’t put all your eggs in one basket,” he stresses; “that’s a strategy that can leave you scrambled or fried in your retirement years.”

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