Are you hoping to make money investing in 2023? Or at least lose less than you did after a rough 2022? Here is one simple question you can answer to get on the right track: How often do you think about your retirement contributions?

I know, boring … but here is some fiscally conscious peer pressure to get started!

Fiscally Responsible Bully

Fiscally responsible peer pressure is not fun or exciting news. This peer pressure results in actions quietly occurring in the background of your life. So quiet in fact, you may forget they are even occurring.

Wanting to make extra money through investing is a phenomenal goal for 2023. This extra income being passive is an added bonus. But how do you get there?

Start With The Easy Questions

Generating extra investment income is a phenomenal goal. An easy and effective starting point is with your retirement savings.

There are 2 questions that you need to answer when first thinking about saving for retirement:

1. Where will you save for retirement?

Two main options to consider: (1) you have access to an IRA, or (2) your employer likely offers a retirement savings plan (e.g., 401(k) or 403(b)).

2. How much will you save for retirement?

There is no minimum contribution limit on a retirement account. But contributing something will help you take advantage of compounding returns over the long-term.

Now That You Have Started, How Far Will You Go?

Ok, question 2 is a little more complicated. How do you decide how much to contribute?

There are three guideposts if you are not sure how much you want to contribute to your retirement.

Do you want to contribute a (1) minimal amount of money to your retirement to get started, (2) up to the employer match, or (3) up to the IRS limit?

Long-Term Stability

Your final step is to make your decisions sustainable after you answer those two questions.

The easiest way to make your retirement savings sustainable is through automatic contributions. Automatic contributions to your retirement account establish you as an upper-echelon member of retirement savers.

Automation solves a lot of problems, however, there is one fly in the ointment: your retirement contribution amount. Question 2 rears its ugly head again!!

Periodically assess whether your contribution amount is appropriate.

Increase your contributions if your income has increased significantly due to a promotion/raise, or a new job; your expenses decreased significantly due to paying off some form of debt.

Decrease your contributions if your income has decreased due to a demotion or career change; your expenses have increased due to taking on more debt (e.g., buying a home/car).

More Money Is That Easy

Investment income is never guaranteed, however, intentionally setting or increasing your retirement contributions is a large step in the right direction. Answering two simple questions is all you need in 2023 to improve your odds for a year in the green. Then automate your contributions as much as possible to leave stress behind.

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