5 Simple Steps to Help You Save for Retirement

Concrete goals to keep you on the path to retirement.

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Many of us put off saving for retirement. But the longer we put it off, the more difficult retirement will become. One of the most important things you can do is to write down your financial goals. Once your goals are written down, they are transformed from fleeting ideas into concrete projects. The written goals will help keep you on the path to retirement. Here are the steps to get started.

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1. Figure out your goals. This can be difficult, but most people already have some ideas about their retirement. One goal could be to retire by the time you are 55. Another goal could be to retire to a location you love, such as Italy. Most people also have an idea of how much monthly income they would need for retirement and can set those goals accordingly. A financial goal could be an income of $40,000 per year after retirement. Write these goals down on a clean piece of paper and post it on the wall next to your computer monitor, or somewhere that you will see every day.

2. Flesh out details and set intermediate goals. If the financial goal is to have $40,000 of annual income after retirement, you'll need to research how to achieve this goal. It will take time, but each investor will find the right investments that work for them. For some, it might be dividend stocks and bonds, and for others, it might be rental properties.

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Let's simplify this and assume we need $1 million to generate $40,000 at a 4 percent withdrawal rate. Of course, most people do not have $1 million invested. The key is to figure out how to get to that point by the time you retire. There are many helpful retirement calculators online that will give you an idea of how much you need to save to reach your goal. The Bloomberg calculator can give you a quick estimate. A 30-year-old investor who wants to retire at age 55 and has $100,000 invested will need to save about $10,400 per year to reach the $1 million goal. Write down "save $10,400/year" on your goal sheet.

3. Accountability. Next, you will have to hold yourself accountable. If automatic deduction is possible, set it up. You will need to be disciplined and contribute to retirement consistently, and review your goals and progress at least yearly.

4. Persistence. Work with persistence toward your goals. If you need to adjust your lifestyle and reduce expenses, grit your teeth and do it. Most people will need to reduce expenditures to reach their retirement goals. It takes discipline and persistence to save and invest for 25-plus years. Consistently saving and investing over the 25-plus years will almost guarantee a good, positive return. In the short term, the market may be volatile, but you need to keep contributing to take advantage of the lower stock price.

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5. Adjust. Life won't turn out like we plan, so adjust accordingly. You might have a medical emergency this year and won't be able to contribute to retirement, but you can adjust your plan when you can contribute again. The $10,400 per year may need to be increased to reflect the situation.

Keeping your goals in sight and consistently working toward them will get you there in the long run.

Joe Udo is planning an exit strategy from his corporate job by reducing expenses and increasing passive income. He blogs about his journey to early retirement at Retire by 40.