Finding Extra Money to Save for Retirement Chances are you would like to be able to save more money each month toward your retirement or other financial goals. Who couldn't’t use a little more? Given the reality of lower interest rates and investment returns that many have experienced in recent years, simply saving more money is the key to building a sufficient nest egg for retirement. But unfortunately it’s not so simple to come up with the extra cash to sock away. It may be challenging, but not impossible. Start by looking at it this way; if you decide to set aside another $100 per month for your retirement, it amounts to $3.33 per day. If you’d like to be more aggressive and save an extra $500 per month – you would need to set aside $17 per day or about $120 each week. In some cases, saving these manageable amounts daily can add up – and lead to a more secure financial future. Here are a few savings opportunities to consider: Refinancing your mortgage If the equity position in your home is favorable and you are paying interest on your mortgage at a rate that is noticeably higher than today’s low rates, refinancing could save you a significant amount on your mortgage. The way to benefit the most from refinancing is not to increase your spending on other things, but to invest each dollar saved in a retirement plan or to help you fund other financial goals. Changing your tax withholding According to the IRS, as of the end of April 2012, the average tax refund paid on a 2011 tax return was $2,700. If you are consistently receiving a sizable refund and don’t anticipate major changes in your income or deductions claimed on a tax return, you can adjust the amount withheld from your paycheck. Talk to your employer about completing a new W-4 form, and put your bigger paycheck to good use. Reducing gas costs With gas prices hovering around $3 to $4 or more per gallon, it’s become more expensive to drive. Cut back on unnecessary driving and consider finding alternative ways to get to work such as public transit. Walk and bike more to nearby places. More careful use of vehicles could generate $50 to $100 extra dollars each month. Managing your food budget Food can be one of the biggest expenses for a family. Better meal planning can help you stretch your grocery dollars by reducing the amount of food you throw out and the number of times you pay for meals at restaurants. In addition, think about other ways to cut back, such as eating fewer lunches out during the week or cutting back on expensive coffee drinks that can easily add up. Identifying home expenses you can live without Many of us pay exorbitant bills for services like cable or satellite TV without actually using the service enough to justify the expense. Consider whether a movie rental service might be a cheaper alternative. Explore whether there are cheaper ways to access phone service than what you pay now. A little frugality now could make a difference in the future. Making a big difference over time Nobody will claim that saving an extra $5 here or there will create instant financial security. But a patient, consistent strategy of saving and investing more for your retirement or other financial goals can truly add up. If you can save an extra $100 per month and invest it in a tax-deferred IRA or workplace retirement plan earning an average annual return of seven percent per year, that money would accumulate to a before-tax value of: • $17,409 in ten years • $52,394 in 20 years • $122,699 in 30 years. If you increase your contribution to $300, it would, based on the same return and tax assumptions, grow to a value of approximately $368,000 in 30 years. Saving an extra $500 per month with the same assumptions would accumulate $613,495 in retirement assets in 30 years. Extra effort now could significantly improve your financial standing in retirement. Consider meeting with a financial adviser to help you get started and explore more saving and investment options. ### Jim Hanna, CFP®, MBA is a Financial Adviser and CERTIFIED FINANCIAL PLANNER practitioner ™ with Ameriprise Financial Services, Inc. in Topeka, KS. He specializes in fee-based financial planning and asset management strategies and has been in practice for 18 years To contact him by email: firstname.lastname@example.org. Adviser is licensed/registered to do business with U.S. residents only in the states of Kansas, Missouri, Colorado, Nebraska, Oklahoma, Texas, Indiana and Georgia. Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients. © 2012 Ameriprise Financial, Inc. All rights reserved.