Today, if you’re like most Americans, spending less and saving more to achieve your retirement goals is a financial headache. With job layoffs, salary cuts, rising expenses, high cost of living or raising a family, many have reported having savings less than $1,000, which is a looming thought that can scream panic in the minds of many.

Almost half of Americans between the ages of 18 and 34, as well as between 35 to 54, have not begun to save for retirement. And, from talking with some of my clients, they seem to give a second thought as to how much they will need for retirement.

The biggest mistake in retirement is not planning early enough to build your nest egg. And without proper savings goals and proper financial advice, you will devastate your chances of transitioning from your working years into your retirement years.

So how can you avoid making poor decisions now before you retire? In order to find the answers to your questions, here are some suggestions to help you begin the process of preparing for retirement and to determine your sources of income.

Review Your Retirement Accounts: Retirement plan reviews should be held at least once a year. Ideally, you will need about 70 to 80 percent of your pre-retirement income to maintain your post-retirement standard of living. For example, if you earn $60,000 per year before retirement, you are going to need $42,000 to $48,000 (70 percent or 80 percent x $60,000) per year to maintain your standard of living or to continue living the way you are accustomed to living. But keep in mind you may need more due to significant amounts of debt.

Develop a Post-Retirement Budget: The most important step is to increase your savings rate for retirement. People who set retirement goals, change poor spending habits and stick to their financial plan are better equipped in supporting themselves financially. The first thing to do is to develop a checklist for when you would like to retire. Then, figure out how much you need for retirement, who you are, what you like to do, and what kinds of financial choices you have.

Next, grab a calculator and run an inventory of your assets and liabilities. Go through your savings and retirement accounts, your investments, your insurance policies, your home, other properties, and liabilities by utilizing a cash flow excel spreadsheet, as well as a personal net worth worksheet, and retirement life-planning worksheet. Most importantly, use these calculators to help stay on track toward your retirement goals such as a retirement planning calculator, retirement income calculator and a retirement shortfall calculator.

Pay Off Debt By Developing An Emergency Savings Fund: When you develop a baby emergency fund, it will cover you when you have unexpected expenses, while allowing you to continue in staying focused to pay off your debt by utilizing the debt snowball method. Once you become debt-free, you can become your own bank by opting into developing a bigger emergency fund instead of taking out a loan against your retirement vehicle.

My suggestion? Start an emergency fund by setting up automatic transfers from your checking account into a savings vehicle. Back in 2008, when the unemployment rate began to drastically decline, about 46 percent of workers who lost their jobs cashed out their 401(k) accounts altogether. To avoid facing a penalty in cashing against your qualified retirement plan, you need to make an emergency fund a “top-dollar” priority.

Look For The Best Investment Vehicle Values: Invest to Gain Tax-Deffered Money: Your money needs to provide for you for a long time, and you’re going to need a good-sized chunk of money more than you realize. Opting out on paying taxes for as long as possible may be worth more than you think. Thankfully, there’s a way to do just that. This is called tax-deferred growth investments, and it’s what enables your investments to grow over time without losing money to the IRS along the way. Tax-deferred growth is investment growth that’s not subject to taxes immediately but is instead taxed down the line.

Another important factor to consider when retiring is the impact of inflation on your nest egg. Since 1916, inflation has leveled at 3 percent per year. This means that you will need 3 percent more per year to buy the same goods and purchases that you bought in the previous year.

Invest in a Cash-Value Life Insurance And Long-Term Disability Insurance: If you have a stay-at-home spouse or children who depend on your income, life insurance should be part of your retirement financial plan. Having enough insurance can offset larger debts such as a mortgage and can protect your family in the event of an unforeseen circumstance or even death. In addition, if you were to face a life-threatening illness or become disabled or can no longer work, disability insurance can give you the ultimate financial protection when it comes to everyday expenses.

If you are receiving life and disability insurance as a benefit through your employer, that’s great! But your employer-provided life and disability insurance may not be sufficient; you may need to supplement it with a policy of your own.

In closing, try to divert as much of your earnings into savings as much as possible. If you’re concerned about saving money for retirement, give my office a call today.

Ebony Hazeleger is the owner and creator of Home Plan Advisors, which specializes in helping families become debt-free, maximize savings for college expenses and retirement, establishing an emergency fund while minimizing risk and income taxes based upon her smart money management system. For information, call (866) 248-1871 or visit

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