I began participating in the deferred compensation program as soon as it was available as a benefit to state employees.
Several factors influenced me to save for retirement. I grew up with extremely limited resources, began working the summer before my junior year in high school and was a work study student in college. Throughout my childhood, many of the adults I was exposed to either had zero or minimal pensions and were living at or below poverty levels. Some worked tirelessly for years for employers who provided no pensions, some had cashed in retirement plans when moving from one job to another, and far too many were surviving solely on SSA benefits. Throughout my career with the state, I talked with multiple seniors who worked beyond full retirement age simply because they could not afford to retire and others whose pension income was barely more than their health care premiums. I experienced and witnessed poverty and I made a decision early in life that I would not allow my golden years story to end financially where I began.
I created a financial budget as part of planning for retirement. I had to become debt free before I could retire early. I identified and then minimized mandatory living expenses. I even moved to a much smaller space several years prior to retirement and practiced living on 30% less income a number of times before it became my reality. I am still working on my impulse spending habits, but that was a major behavior change that I needed to master in my pre-retirement plan. And, because my personal retirement planning does not include taking early Social Security benefits at the age of 62, I also had to have a plan for additional streams of income beyond deferred comp and beyond my pension check.
Start saving now! It is never too early to start and if you are already saving, boost your savings regularly. The longer you save, the more you will end up with. If all you can start with is the minimum allowed, save that. Our MOSERS defined benefit plan is outstanding, but you will still need to supplement that income if you want to enjoy retirement. I recommend attending the excellent retirement and financial planning seminars presented by MOSERS and deferred comp. Also, visualize the life you want to live after your retirement party ends. Will you travel? Have a home mortgage? Condo fees? Unanticipated home or auto purchases and/or repairs? Out of pocket long term care costs? While it may seem like you cannot afford to invest now for your retirement, it is "the" most important investment you need to make in order to ensure that you can retire and live a poverty free lifestyle. Set high retirement savings goals, too. Do not under estimate the reality of living on a reduced, fixed income. Take control of your retirement future by planning well and often and by planning in advance for it. When you have a plan, revisit it regularly to ensure that it still meets your needs, and do not retire before you can actually afford to. I have yet to meet any retiree who thinks their retirement income is too much, I have however, I met far too many who say exactly the opposite.
If you're already saving, find ways to increase the amount of your savings periodically, whether it's a large amount or small amount.
