Need to start saving for retirement? Here are 5 easy ways to get going.

By Angela Moore

One of the most important aspects of financial fitness is planning for retirement, and a crucial fact about retirement planning is that the earlier you start doing it, the easier it is to reach your goals.

But getting started can be the hardest part, because retirement is a big, long-term goal that for many people is still far in the future. In addition, there are a lot of things competing for attention and money - bills, student debt, travel, fun - and who wants to put money away for some distant future? It's hard to feel urgency to focus on something that may be decades away.

It's important to be proactive, though, because financing our old age is increasingly up to us: Traditional pension plans are rare, only about half of American workers have access to a retirement-savings plan like a 401(k), and Social Security is facing a cash shortfall.

So while it may feel impossible, it's important to start saving - even if you begin with just a little. There may also be money or help out there that you're not aware of. Here are five easy steps to help you get going.

1. Figure out how much you're spending

"Be curious - not judgmental - about where you're spending," says Anne Lester, the author of a new book called "Your Best Financial Life" and the former head of retirement solutions at J.P. Morgan.

We have quick - often instant - access to so much, and that can lead us to buy more than we need. Streaming entertainment, food-delivery apps, same-day delivery and easy payments for just about everything make it easy to overspend.

"It's so easy to gratify every little whim we have," says Lester. "Challenge yourself not to blindly spend. Slow things down. Write a check. Use cash."

Figure out where you are spending too much or outside of your priorities, and then redirect that money to savings and investments. Consider your subscriptions, lunches out, gym memberships you don't use and things like late fees. Try taking a one-month break from online shopping and see how you feel. Spending is so easy, but it takes a bit more effort to save, so find that $50 a month you can cut and then have it automatically transferred into a high-yield savings or investment account.

"There's a lot of friction to saving, and the fear of doing it wrong is real," Lester says.

2. Start early

Younger people have a long way to go until retirement, which is both good news and bad news.

The good news: Putting aside relatively small amounts of money over decades allows it to grow into a very large amount. The bad news: It's hard to get excited about saving for a goal that feels so remote.

"One of the most important practices is to start saving and investing early and in the right type of account," says Gregory Guenther, managing director and financial planner at Grantvest Financial Group in Matawan, N.J. "I recommend to many of my clients' children and grandchildren to consider opening a Roth IRA as soon as they are able. The long-term advantages of tax-free compounding are tremendous. ... Small savings now add up to big savings down the road."

3. Look at what's right in front of you

Are you taking advantage of what's being offered to you now? Look for things that are immediately within reach: a 401(k), an employer match, workplace educational or planning services. Brent Bruggink, director of retirement-plan services at CG Financial Services in Williamston, Mich., says he sees people miss things all the time. "Sometimes it's because they think they can't afford it, or they don't know how, but often it's a lack of education," he says.

4. Automate good habits

Have money taken automatically from your paycheck and sent to your 401(k), IRA or high-yield savings account before you can get your hands on it. If you get a 3% raise, put 1% toward your 401(k) and 1% toward another financial goal, and let yourself spend and enjoy the last 1%.

"This is one of the easiest ways to reduce the pain of saving for the future," says Alex LaRosa, an investment adviser representative at Blue Bell Wealth Management in Pennsylvania. "Most humans are biased towards their present self and will opt to splurge rather than save for a future goal."

Automate as much as you can. When you contribute to your 401(k), you're using a strategy called dollar-cost averaging. That means you're investing a set amount over a long period of time in all market conditions. It keeps people from trying to time the market or making emotional decisions about their money.

"Retirement investing doesn't have to be a sexy thing," Bruggink says. "Dollar-cost averaging takes out a lot of the human intervention and second-guessing. It works."

5. Make a vision board

To feel more connected to your future retired self, Michelle Crumm, president of Belle Eve Financial in Ann Arbor, Mich., suggests putting together a retirement vision board. A vision board is a collage of your dreams and goals. So a retirement vision board may have pictures of places you want to travel or live, family members you want to connect with and activities you want to try. Creating one can help you figure out your goals, build confidence and serve as a source of inspiration.

"So much psychology goes into financial planning," says Crumm, who runs vision-board seminars for clients. "These scripts impact our relationship with money."

For her seminars, she gets a group together, provides materials and tells participants to be very specific: the tennis racquet and golf club, the cute cottage on the ocean, the coffee shop where friends will meet up. This helps them visualize their goals.

"Once you have that, it's easier to save for your retirement," Crumm says. "More clarity around the goal makes it easier to invest in your financial life the way you want to live."

April is National Financial Literacy Month. To mark the occasion, MarketWatch will publish a series of "Financial Fitness" articles to help readers improve their fiscal health, and offer advice on how to save, invest and spend their money wisely. Read more here.

-Angela Moore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

04-27-24 0941ET

Copyright (c) 2024 Dow Jones & Company, Inc.