Still trying to figure out the best way to save for retirement? Follow Rob Gronkowski’s example, for starters. Read on to find out more.
In this article:
- How Rob Gronkowski Reached His Retirement Goals at 29
- Don’t Spend What You’re Able to Save
- Make Your Savings Work for You
- The “Hard/Easy” Principle
The Best Way to Save for Retirement
How Rob Gronkowski Reached His Retirement Goals at 29
Rob Gronkowski of the New England Patriots recently announced his retirement at age 29 — with a nest egg of $54 million!
He was able to save this much retirement income before he hit 30. Is that even possible?
Rob may not be a retirement expert, but he has shared personal insights on saving for retirement that anyone can benefit from.
And the choices he made weren’t even that extraordinary!
Several of these retirement financial planning tips are things I’ve advised my own clients to do for years.
Now, as a disclaimer – having a spot on the NFL payroll was a huge help in building Gronkowski’s nest egg.
And this strategy probably won’t add millions to your retirement savings overnight. To an average salary-paid American, $54 million in retirement savings can seem impossible to achieve and for some, it might just be.
But Rob Gronkowski’s know-how on retirement financial planning could easily be the difference between you retiring fully-funded at 55… or having to work until you’re 67.
That’s why I’ve decided to share his strategy with you today.
Don’t Spend What You’re Able to Save
Maybe you’ve asked yourself before, “What’s the best time to start saving for retirement?”
The first step to any successful saving strategy is knowing how much you’ll need to live comfortably.
Once you’ve come up with a figure you’re happy with, it’s smart to get in the habit of saving any income you receive that puts you above that number.
In his 2015 memoir, Gronkowski revealed that he hadn’t touched one dime of his signing bonus or NFL contract money.
“I live off my marketing money and haven’t blown it on any big-money expensive cars, expensive jewelry, or tattoos…
And I still wear my favorite pair of jeans from high school.”
He only spends money he earns from endorsement deals with brands like Nike, BodyArmor sports drink, and Dunkin’ Donuts.
Most people don’t have endorsement deals with big-name companies to live off of, but that’s not the point here.
Gronkowski was able to save such a substantial amount because he knew exactly how much income was necessary for his lifestyle — and what was just extra.
Sure, it feels like an easy thing to say when you’re staring at millions of dollars.
But the discipline required here is no different than what it takes to save your earnings from a side job, from your investments, or your annual bonus.
Most people spend their extra income on unnecessary stuff they don’t really need. When they need money for important situations, they end up draining their savings.
Determine the cost of your monthly living expenses and stick to that amount as much as possible. Of course, there will be times when you’ll need to dip into your savings, but that’s what an emergency fund account is for.
Make sure you know your limits when it comes to spending your salary and your extra income. If you don’t need to upgrade your car, then save your annual bonus.
Bottom line: If you can afford to save it, save it.
Make Your Savings Work for You
Once you’ve started saving, it’s time to consider an investment strategy to grow your wealth.
Talk to a financial planner to help you look for the best investment options for your money.
Instead of recklessly spending his income from the Patriots, or just setting it aside in a bank account, Gronkowski has steadily invested all of it.
And his investing habit has paid off in a big way.
After all, if you put your hard-earned savings into a standard bank account, you won’t see much return. Savings in a standard bank account decrease in value as the years go by because of the rising inflation rate.
What is the inflation rate? This is the rate of which a currency loses its purchasing value.
If the interest rate of your bank account is at 1% a year, a $10,000 deposit will become $10,100 after a year. But if the rate of inflation is at 2% that year, your $10,100 will only be worth $9,898.
If you plan to retire using just your bank savings, you’ll have to cut back on your living expenses in the next few years.
That’s why it’s smart to contribute to a 401(k), Roth IRA, a portfolio of steady stocks — or any investment approach that fits your strategy as early as possible.
You can watch your savings grow in addition to your regular contributions.
The “Hard/Easy” Principle
This is the Rich Retirement principle I call “Hard / Easy” in action.
Every dollar you save and collect now (hard) equals freedom and increased options for you in the future (easy).
Put simply… the sooner you put your savings to work, the fewer years you’ll need to spend in the workforce.
With more savings generating income in investments, you won’t have to double your effort in generating money for your savings goal.
Although far from an expert on retirement, Gronkowski just might be a lot smarter than most people give an NFL athlete credit for.
The single smartest thing he did was create a savings plan and stick to it.
That’s exactly what I encourage you to do as well. Look for the best way to save for retirement like what Gronkowski did.
You don’t need millions — or even thousands — to take a page from this NFL superstar’s playbook. You just need to start and have the power of compounding returns work its magic.
Determine your cost of living and stick to it. Like Gronkowski, invest the bonuses you receive in a retirement plan that works for you.
Better yet, ask your company if you qualify for a Traditional IRA, Roth, or 401(k) retirement contributions based on your compensation. If not, talk to a financial adviser to look for other investment options.
You owe it to yourself to live comfortably in retirement.
And as long as you have a plan in place and stick to it, I’m confident that you’ll enjoy a Rich Retirement.
Do you know the best way to save for retirement that best fits your earnings? Share your investment strategy in the comments section below!
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