No Regrets Retirement

Tomorrow's Success May Depend on How You Budget Today

Adjust how you handle finances today and you'll be less likely to look back on your "savings" years with regret. Learn from the experience of others, and use some basic budgeting strategies to help you stay on track.

Rewrite Your Future

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Don't spend what you don't have, budget instead

Creating a spending plan for each paycheck puts you in control of your money versus it controlling you. You'll likely have competing goals, like monthly bills, saving for a child's education or purchasing a home. Realistically, retirement is the only goal that the bank won't lend you money for, so it needs to be a top priority. Make sure to include it in your budget.

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Pay off high-interest debt

If you have high interest debt, there's a good chance you're spending more than you make. This could require a lifestyle change, such as waiting to buy until you've saved instead of using a credit card.

Buying something you don't have cash for could end up costing significantly more than the original cost of what it's worth. Monthly high interest rates are likely keeping you from getting ahead financially.


The High Cost of Paying the Minimum

Paying only the minimum payment allowed on high interest rate debt is likely keeping you from getting ahead financially. For example, if you have a credit card balance of $8,000 at an 18% interest rate, it would take you 30 years to pay off the debt at the minimum payment, costing you $11,616 in interest payments alone.

The above calculation assumes you will not make additional purchases with this card. Source: Bankrate ®

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Save for the unexpected

Nothing derails your finances more than unexpected expenses. It's a good idea to save enough to cover living expenses for three to six months.

One way to build up an emergency fund is to free up money by paying off high interest debt. Or, cut other corners like choosing home-cooked meals or movie night at home.

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Put windfalls to work

Many people see a work bonus or their tax return as play money. Instead, consider putting extra money to work for your future—like paying down credit card debt, funding your emergency nest egg or investing in your retirement.

Even if you save or invest only a portion of extra money, it'll get you closer to your long-term goals. Plus, once your finances are in order, you can save for vacations and shopping trips and enjoy them even more.

What do people ready to retire say about how they've saved?
• Nearly 75% underestimated how much they should be saving.
• Not saving earlier for retirement is one of their biggest personal regrets.
• More than 90% wish they could have talked to their younger self and told them to save more.

Source: Source: 6th Annual Survey of Retirement Savings, American Century Investments®, 2019.

Save It vs. Spend It

See the impact investing an additional amount each month could mean for your retirement savings.

Additional Monthly Investment Amount In 20 Years
$25 $11,391
$50 $22,782
$100 $45,564
$150 $68,346
$200 $91,129

Source: American Century Investments Compound Savings Calculator. Chart assumes no specific portfolio with 6% returns over 20 years.

This hypothetical situation contains assumptions that are intended for illustrative purposes only and are not representative of the performance of any security. There is no assurance similar results can be achieved, and this information should not be relied upon as a specific recommendation to buy or sell securities.

The Bottom Line

Getting your financial house in order is not only important for your peace of mind today; it can also make a difference in how you face your future—with confidence or regret.

What's Holding You Back?

Find out why it's important to contribute to a retirement plan.

Learn More

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.