Whether you love March Madness, the Olympics, or X-Games, the finals are chockfull of the very best of the best. 

As a Bay Area resident, there’s nothing better than watching the Splash Brothers (Klay Thompso and Steph Curry) of the Golden State Warriors crush competitors in the NBA Finals.

And, as a soccer guy at heart, it was amazing to see the Tottenham Hotspur work their way to the Champions League final with Liverpool (though, let’s be honest, that hand-ball penalty call in the 30th second set the tone for the whole game.). 

The finals are a culmination of all the time and effort athletes have put into honing their skills. It’s where the hard work pays off. 

Saving for retirement is like prepping for the finals. The big difference is the timeframe. Unlike athletes who have just one season to correct their mistakes and improve their techniques, individuals have years to save for retirement and make up for lost opportunities.

But just as in sports, when retirement is upon us (when the finals arrive) you have to be completely ready—there aren’t any do-overs or reset buttons. That’s why it’s so important to develop good financial habits now so you can experience the rewards of a dignified and independent retirement.

You’ve probably read a ton of articles on retirement saving that were full of financial jargon and acronyms you didn’t know. Not to worry… I’ll keep this one focused on the finals. As long as you understand sports, you’ll be good to go!

So, let’s talk about how saving for retirement is like training for the finals. And while we’re at it, let’s discuss some practical tips for saving even more money for your “finals.”  

Training Too Little

If you’re an athlete, the last thing you want to do is get to the finals and realize you didn’t train enough. Let’s say you’re a runner, for example. If you’re training for a marathon and 8 miles is your longest run, there’s no way you’re prepared to run 26 miles. There is a good chance you’ll injure yourself. And if by some miracle you do finish the race, your body will feel terrible… nothing like a champion.

Not saving enough for retirement works the same way. If you need $1 million for retirement, but you only have $500,000 saved, you’ll either have to postpone retirement or lower your standard of living (neither of which are ideal).

Training Enough (Or Even A Little Too Much)

Did you know there is a “golden mean” athletes strive for in training? It’s where they strike the perfect balance of just enough training. You make sure your team has practiced enough, but you don’t over practice to the point where your team is losing sleep and it’s affecting their health. 

Saving for retirement is much the same. If you think you’ll need $3 million for your 30-year retirement and end up saving $3.1 million, you’re totally on track. Knowing that you have a $100,000 cushion is a good thing. But at the same time, you don’t need to go overboard and jeopardize your lifestyle while you’re still working. Trade-offs work both ways. You want to strive for the golden mean. 

Training Way Too Much

Overtraining for a finals match often leads to injuries and even a complete inability to play in the finals. That’s why athletes strive for that golden mean we talked about earlier. In fact, most coaches would rather slightly undertrain their team than go crazy and train way too much. 

Now, I know what you’re thinking, “How can saving too much be a bad thing?” It’s a valid question worth asking. 

Every financial decision you make comes with a trade-off. If you choose to save instead of aggressively pay down debt, you may carry unmanageable debt payments into retirement. Or you might not be able to contribute as much to your children’s college fund. Or… you may be unnecessarily limiting your lifestyle prior to retirement.

Instead of going overboard on saving for retirement, try to reach the golden mean so you can have a happy life now (while you’re training) and later (when you make it to the finals). 

Tips For Saving For Retirement

It’s hard to think about money when you’re young because retirement seems so far away. But, if you look at the numbers, the early bird gets the worm. 

Thanks to compound interest, the earlier you start saving for retirement, the more time your money has to grow. This means you can save less in the long-run but still end up with the same amount of income in retirement.

Here are just a couple of tips to help you save for retirement:

  1. Take advantage of any company match for a 401(k) or IRA. If you contribute the full amount that a company will match, you get a 100% return on your investment. That’s a lot of free money. 
  2. Automate your retirement savings. This ensures you never miss a payment and you’re never tempted to spend the money on something else. 
  3. Increase your retirement savings little by little every year. Add one percent more of your income every year to your retirement savings until you reach 20-25% and then keep it at that amount for as long as you can.
  4. Max out your IRA contributions every year.
  5. Consider putting any funds that you earn from a side hustle into your retirement fund or your taxable investment accounts.

How To Approach Work Differently With Retirement In Mind

For many people, retirement is the time to travel as much as you want, see the grandkids, not have to worry about an alarm clock, and have more time to pursue your interests.

But why wait until retirement to have all of those things? If you approach work differently, retirement can be less of a big deal

Here’s what I mean. 

A lot of people look forward to retirement because they won’t have to commute or be at work at a certain time. To enjoy these benefits now, try looking for a remote position or freelance work that would give you more flexibility. If that’s not an option, see if your boss is open to you working at home a couple of days a week.

Think of all the hobbies you want to enjoy in retirement and make time for them now. If gardening is your thing (as it is mine) get up early on Saturday mornings and do some work outside. If spending more time with your family is one of your goals, try to adjust your hours at work. Whatever it takes, start figuring out ways to do the things you love most now. 

Retirement can be an amazing time in your life if you have taken the time to prepare for it. Just as an athlete seeks the golden mean of preparation for the finals—not underprepared or overprepared—seek the golden mean of saving for retirement, and you’ll experience happiness not only in your working life but also in the years to come.