Saving Principles for Retirement Investing

How much you save is your most important retirement decision.

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You may have heard that your savings rate is the biggest determining factor in how likely it is that you will retire comfortably. Unfortunately, knowing this probably won’t make you save more. Let's face it. Saving is difficult, and it is also quite boring.

But saving is so important. Saving gives you a base so money can start working for you. Practicing disciplined saving can also help you to become a better investor. Here are a few ways common saving principles can improve your retirement investing, which hopefully will give you an additional push to conserve a bit more.

Take the time to spend smarter. One of the best ways to improve your quality of life without spending more is to look through your expenses and find more affordable alternatives where you can't tell the difference. Use the money instead on items that you actually care about. This applies directly to retirement investments. How many of your investments have similar equivalents that are cheaper to own? If you have multiple brokerage accounts, consider merging the investments so the combined asset level qualifies you for cheaper and higher quality service.

Consider pay as you go. Paying for monthly fees is often a money-pit because you may not constantly use the services enough to justify the costs. This happens in the investing world too. There are some people who may need the constant hand holding that makes a retainer fee worth the cost. But those who don't talk to their financial advisers often shouldn't be constantly paying for advice via a percentage of assets. It might make sense for you to move to a fee-only adviser where you are only paying them for advice on an as-needed basis.

Ask if it's worth keeping if you were to start all over again. Inertia is a powerful phenomenon, but it could be deadly to your investment results. It's common for average investors to have multiple investments in different accounts simply because they haven't gotten around to selling them, just like you'll always find a pile of junk every time you relocate to a new home. Come up with an investment plan with an appropriate asset allocation, and then regularly rebalance your investments and get yourself to the optimal investments you need.

Don't let the perfect plan get in the way of a great plan. As with cutting expenses, many people don't take action because they are trying to wait for the best possible alternative. But the longer you wait, the more you are throwing money down the drain. This happens frequently with investment plans too. Not many people have one because people are afraid to make mistakes, but a plan is essential to properly invest for retirement.

Keep working at improving the specifics. Even if you have an excellent financial plan for your personal situation and risk tolerance, the plan can become out of date. Technology changes and new ways of doing things routinely get introduced to the market. Give your plan some thought when you get a chance and see if you can improve some of the details. There are many investment mistakes you can make, and vigilance is required to make sure your financial plan doesn’t get off track.

David Ning runs MoneyNing, a personal finance site that shares money moves you can make to significantly increase your chances of having a comfortable retirement. He likes to share simple changes that anyone can make, such as picking the best online savings account and figuring out whether a 0 percent balance transfer credit card makes sense.