If you’ve been thinking about increasing the amount of money you’re putting away for retirement, but you aren’t sure how to make it happen, it might be time to consider a fresh start with your retirement savings. A fresh start is when you frame future moments in time as a new beginning.
In a recent experiment, university employees were given an opportunity to increase their savings contributions right away or to set up a specified point in the future to do so. It was discovered that being able to choose a date in the future increased the likelihood that the employee would choose a point in the future, indicating that fresh-start framing does work.
If you are planning to retire in the near future, consider working with Solivita Living. We are a real estate agency based in Kissimmee, Florida, specializing in 55+ communities in Central Florida. Our locations include Solivita, Four Seasons at Orlando, Trilogy, and Del Webb.
In this article, we’ll explore some options for “fresh start” dates to help motivate you to increase the amount that you’re saving for your retirement.
Options for “Fresh Start” Dates
When it comes to increasing retirement savings, many people choose a specified future date. Some of the most common options for “fresh start” dates include:
Schedule an Automatic Increase
Check with your plan sponsor to find out if you can schedule an auto-increase. If so, choose your future date and set it up through your online portal. Many people choose the new year as a time to start over. If this doesn’t seem motivating for you, consider choosing another date that represents a time in your life when you began moving forward.
Your Birthday
Research shows that it’s easy for people to get discouraged if they plan to increase their 401(k) contributions but haven’t taken the steps to do it. Therefore, if you want to increase the amount that you are saving for retirement, consider using your birthday or another significant date as an opportunity to break from past behaviors and put yourself on a path to a more positive financial future.
Consider Other Firsts
If you’re not particularly motivated by using the dawning of the new year or your birthday to increase your retirement savings, consider other firsts in your life. Some people choose to celebrate the anniversary of their sobriety, the first day of a new job, the first day of school, and many other events.
Take Advantage of Behavioral Finance
Something else to consider is that change happens quickly. You can use your “fresh start” to banish your former self to the past. Also, be intentional when you frame things. For example, the “first day of summer” is much more motivating than “the second week in July”. You don’t want your fresh start to be just another day.
Speak to Your Plan Sponsor
Your plan sponsor, typically your employer, can help by highlighting various opportunities to make a fresh start and communicating with employees around specific temporal landmarks. Many people agree that plan sponsors must be involved in helping employees take advantage of a fresh start. Using a temporal landmark can help you embrace change because you’re already going through a symbolic transition.
Plan sponsors can use these temporal landmarks to increase enrollment and contribution increases by offering options such as:
- Jan 1
- Next work anniversary
- Day 1 of next annual raise
- Day 1 of next tax year
- Specific date of employees choosing
- Next birthday
By connecting the contribution increase to a transition that is already in place, it becomes easier to make a fresh start.
Are You Retiring Soon?
If you are planning to retire soon, consider working with the professionals at Solivita Living. We are a real estate agency located in Kissimmee, Florida specializing in 55+ communities across central Florida. We have several locations to choose from, all of them offering a variety of amenities to keep you active. We look forward to making your transition into retirement as easy as possible.