10 Ways to Boost Your Retirement by $50K
BOSTON ( TheStreet) -- Aside from hitting the lottery or scoring big on a game show, there are numerous ways to add an extra $50,000 or more to your retirement savings.
A little bit of frugality, cutting back on impulse buys and routine spending, can go a long way toward that goal.
Most people waste large amounts of money in small, almost unnoticeable increments. The power of compound interest can help multiply these pockets of small change into something more substantial over the years.
"When you wean yourself off the little impulse buys and put those funds back into your retirement account, not only will you lose a few pounds and get off the caffeine -- you'll wind up a little more comfortable when you retire as well," says Steve Orr, president and owner of Orr Financial Group in Victoria, Texas.Orr says he became acutely aware of the power of incremental savings while teaching his children about finance. As part of that lesson, he would encourage them to start investing a portion of their gifts and allowances from an early age. "Then I watched as the little money they put away each month grew into tens of thousands of dollars in the 1990s," he says. The growth of that money had him thinking about the spending habits encountered each day. "You watch folks at the Starbucks (SBUX) or at the convenience store in the morning to get gas and buy a doughnut or two, and you start to wonder what it all adds up to," Orr says. "As I did financial plans for people, I would see what little bits of money could do over a time period because of returns and the compound-interest miracle. I would do a plan for people, just using average returns, and they would be astounded at just how much money they would have by the time they are 80." The challenge, he says, is making sure they make good on investing the money they trim from expenses. "It is hard to get them started. Once they get on a roll they do pretty good, though. What I'll do is give them a little spiral notebook that sits in a purse or pocket. I'll tell them to write down any money they spend during the day," he says. "Pretty soon they are starting to reduce their spending, and that's when I say, 'Look, you've reduced your spending anyway, why don't you just go ahead and start investing what you save.'" The following are 10 relatively painless ways to boost your retirement savings by $50,000 or more by the time you retire.
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