A study by the Employee Benefit Research Institute shows employees are only saving an average of 10 percent of their earnings. However, when these same workers were asked what percentage of their salaries they should be saving annually in order to live comfortably throughout retirement, the median estimate was 16 percent. That's a whopping 60 percent more than they are actually doing. Meanwhile, recent research by financial experts say we should be focused on saving at least 15 percent of our earnings in order to retire safely. So, why then are so many workers failing to do so?
The History Of The '10% Savings Rule'
While it's hard to pinpoint who was the originator of this rule, research shows this advice has been passed along for decades now as a way to give people a general sense of what they need to save for retirement. But, as many well-known financial experts have since proven, this rule should come with a footnote that says, "As long as you start by age 25 and never stop saving 10 percent of every dollar you earn until age 65."
As a result, we have a lot of people (maybe even you?), who are saving, but likely not enough. Granted, some reading this may feel they don't earn enough to save 15 percent, or even 10 percent, a year for retirement. But, for many of us it's more an issue of being disciplined enough to save consistently.
3 Ways To Earn (And, Save!) More Money For Retirement
If you want to put away more for retirement, consider these tips:
- Launch a 'hobby hustle.' Also, known as a 'hobby career' it's a special part-time job that is tied to your passion and interests. For example, I love to work out and became a fitness instructor. I teach a couple of times each week. While the pay isn't huge, I do get my gym membership for free.
- Build a strategy to earn a raise. If you're one of those people who thinks you should just keep your head down, work hard, and wait for your employer to recognize your efforts and promote you, then I suggest you consider a more proactive approach. Set a meeting with your boss to discuss how you can map out a plan to build your value for the company so they can justify giving you a raise. This way, you'll know exactly what you need to do to earn more money and your employer will be willing to pay for it. Salary negotiation is a very important skill that few ever learn correctly.
- Declutter for cash. Thanks to sites like EBay, Facebook Marketplace, and LetGo, you can take pictures and post your junk for sale online. As they say, "one person's trash is another's treasure." Not only will you free yourself of clutter, you'll put some cash in your pocket.
Don't let a failure to save enough money post-pone your retirement plans. At Work It Daily, we say all it takes is a little more focus on ways you can raise some additional money. Using the tips above, you won't just reach your goal, you'll build some money-making skills too.