The new year begins in September, at least to me.
Energy is unleashed in September with the hazy days of summer behind us, schools starting up and work projects gather momentum once again. September is a good month for reflection about the past year and hopes for the remaining months.
Yes, the delta variant is dampening the traditional rhythms of the month. But fingers crossed and more people vaccinated (please), the economic rebound will continue.
One exercise is to revisit financial New Year resolutions and take stock of your progress. Another is to make a household financial review to prepare for the upcoming holiday season. The pandemic experience may have pushed you to reconsider your job and career. A grasp of household finances is invaluable when looking for work and weighing job offers.
Although examples like these are somewhat different tasks, they share a common goal: Saving more. You can increase your nest egg by putting more into savings and investment accounts, paying down debts, or some combination of the two.
The economic traumas of the great recession and the pandemic downturn tell us we need to do even better at saving. So do economic and demographic changes when it comes to retirement saving.
That's the message of report from several years ago that I came across while researching retirement. In the Morningstar report "A Closer Look at the Cost of Retirement: Savings, Not Returns, Are Key" by David Blanchett, Michael Finke, and Wade Pfau, the authors note that much of the retirement literature focuses on ways to boost investment returns. Their combination of reasonable assumptions about the future puts the emphasis on saving more. There's no getting around it.
For one thing, future returns are likely to be lower considering historically high stock and bond prices. For another, interest rates on safe savings are low. Plus, we're living longer on average.
