Sometimes it can be challenging to save for a goal like retirement that is so far away and so abstract. It's hard to tell yourself it's better to put money in an account you won't have access to until you're 59 1/2 when you can think of so many other great ways to use this money now.
Visualize Your Future Self
The trick is to make the goal less abstract. You are taking care of your future self. Give your future self a name. Visualize your future self with some detail. How do you start your day? What do you like to do in your free time? What are your hobbies? Which joints hurt? What are your dreams?
My future self is named Sophia. Sophia gets to wake up whenever she wants because she is still not a morning person, but now she doesn't have to get up for work. She drinks her coffee on the patio and then goes swimming, practices yoga, or takes a walk in the park depending on the weather and if her knee is bothering her. She gets to travel internationally once or twice a year and takes art classes at the community center.
Sophia is why I invest. I don't want Sophia to have to eat cat food because Sarah felt like she had better ideas about how to spend her money. You can even give your retirement plan a more creative nickname. When I'm feeling pessimistic, mine is "Operation Don't Eat Cat Food." When I'm feeling hopeful, it is "Operation World Traveler." Both are motivational in their own ways.
Give Yourself Concrete Goals
Part of visualizing your future self includes figuring out real goals. How much will you need to support your future self? How much do you need to save today to get to that number? You can figure out how much your need to save to give your future self the income your want by using the Investment Growth Calculator and Retirement Income Calculators on the Know Your Numbers page in the investment course. If you aren't sure about how to save for retirement, review our free investing course and start investing as soon as possible.
Knowing your specific goals, you can start to plan your contributions accordingly. If you can't contribute as much as you need to contribute to meet your goals, try to increase your investments by small amounts.
You may be able to set up workplace contributions to increase automatically as you get raises by choosing a percentage rather than a specific number to contribute. You can try to increase your contribution by 1% each year.
You could open a Roth IRA if you are within the income limits and contribute a specific amount to your Roth IRA each month. If you don't have additional income to invest each month, you could contribute part of a bonus or tax return to the account each year.
Balance Present and Future Goals
Some people get so caught up in living for the future that they miss out on the present. As with everything, there's a balance. You may not make it to retirement and you only live once. But there's a pretty good chance that you will make it, so plan accordingly. Figure out a balance that allows both Sarah and Sophia to be content. Perhaps you can even try to bring some of those future dreams into your present life in small ways.
Practically speaking, finding your balance means being intentional in how you spend your money. Paula Pant's Afford Anything podcast always starts with some variation of "You can afford anything, but not everything. Every choice that you make is a tradeoff against something else.... saying yes to something implicitly means you are saying no to other opportunities." So figure out what you want your yeses to be and spend accordingly. Sophia is one of my yeses. What are yours?
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