Investing for Retirement? 5 Things to Do

By Fergus Cleaver

Who doesn’t dream of retiring early? Anyone who tells you they’d pass up the chance to cut ties with the workaday world while still in their prime probably has a bridge to sell you. (Come to think of it, maybe that’s their retirement strategy!)

The sad truth is that financial reality usually intervenes with our best-laid early retirement plans. Unless you’re fortunate enough to win the lottery, invest in the next unicorn startup, or find yourself in one of the very few careers that virtually guarantees independent wealth, you’re not likely to earn enough to quit your 9-to-5 and spend the rest of your days splurging.

But comfortable, reasonably early retirement is within reach for the vast majority of middle class wage-earners and salaried workers. And there’s really no secret sauce. What separates those who live out their golden years in prosperous comfort and those who toil away until they’re too old to make it any longer is a pedestrian combination of discipline, advance planning, smart (but not brilliant) financial decisions and a knack for avoiding common retirement investment mistakes.

Not sure where to start? Follow these five tips to start your retirement investing journey off on the right foot.

1. Know What You Need

How do you know how much you need to retire? That’s a very complicated question best discussed with your financial adviser. Generally speaking, you want your post-retirement lifestyle to approximate your pre-retirement lifestyle. That doesn’t mean you need to replace your peak income, as you can make up the difference by downsizing your life or cashing out your retirement account over time. But you can’t go into retirement without a sizable nest egg to draw on over what’s (statistically) likely to be two to three decades.

2. Scrimp, Then Scrimp Some More

Here’s a revolutionary concept: Don’t spend more than you earn. Actually, spend a lot less than you earn. Simple.

3. Don’t Try to Knock It Out of the Park

Those legendary stock picks? They’re legendary for a reason. Stick to safe, boring investments—index funds, annuities, bonds and the like. You simply don’t have the time or expertise to craft a get-rich-quick investing strategy, no matter how alluring it appears.

4. Hustle on the Side

When in doubt, increase your income. Whether that means tapping a little-known skill in the wide world of digital talent marketplaces, or buying an investment property that earns consistent rental income, is for you (and your financial adviser) to decide. Just remember: A little extra money never hurt anyone.

5. Stay Out of Debt

Not all debt is created equal. No one’s saying you shouldn’t finance the purchase of your forever home, but if you’re serious about maximizing your earning and saving power, you need to avoid the sort of “junk debt” that can derail your financial plan faster than you ever thought possible.

For starters, avoid payday loans, which serve virtually no positive purpose. And, unless you have a very good reason for racking up credit card debt, avoid that too. Even a modest credit card balance can needlessly accrue hundreds of dollars in interest charges each year—money that won’t flow into your retirement account.

This Is What the Future of Accounting & Bookkeeping Looks Like

Accounting isn’t exactly a compelling discipline. Essential to the smooth functioning of the global economy, yes. The stuff of fanboy and fangirl dreams? No.

Accountants like the fact that their industry has, until recently, been relatively insulated from the winds of technology-driven change. They might not be known for their passion or innovative approach to business, but they do enjoy enviable job security. Every business owner needs accounting services, no matter how large or small their enterprise.

First, the good news. Accountants won’t be obsolete anytime soon. For the foreseeable future, the global business community will need the expertise and insight of seasoned, human accountants and bookkeeping professionals.

“Many small-business owners believe that they can effectively replicate the services of an accountant on their own, either in their spare time or through the efforts of a generalist office assistant,” says Fergus Cleaver, a seasoned accounting professional and shareholder in New Zealand-based Cleaver Partners. “This suggests that the field of accounting actually has room to grow. Despite its age and visibility as a discipline, many businesses that require professional accounting services have yet to retain them.”

Now, the bad news: The fields themselves may have room to grow, but the processes of accounting and bookkeeping can’t outrun the accelerating march of history any longer. These disciplines have already changed considerably during the past decade—slowly at first, and lately with redoubled urgency. Over the next 10 years, they’re likely to change even more dramatically, and that change won’t necessarily be kind to the talented professionals who presently make their living as accountants and bookkeepers.

Here’s a look at what’s coming down the line for these fields—and what aspiring financial professionals can do to prepare.

Better Mobile Capabilities

On-the-go accounting? It’s coming, at least according to the experts.

“[The] cloud and mobile devices…will continue to help further integrate technology into all aspects of a CPA’s daily duties,” David Cieslak, CPA/CITP, CGMA, told the Journal of Accountancy. “We refer to this as pervasive computing.”

Cieslak’s “pervasive computing” will allow accountants to perform rote and high-value tasks alike from virtually anywhere—setting automated reports in motion from the back seat of a taxi, for instance, or running money-saving analytic programs from a beach halfway around the world.

Improved Analytics

Speaking of analytics: Accountants have long been data nerds, but they’ve only recently had the powerful algorithms and analytic tools to support deep, illuminating dives into the raft of financial data they deal with every day. New, technology-driven analytic tools allow accounting professionals to be more efficient with their time, effectively duplicating themselves while teasing out data-driven insights with greater efficacy.

Thanks to 21st-century analytics, every accountant is a miniature CPU—a human-machine hybrid who adds tremendous value to the organizations he or she serves.

Opportunities for Experienced Accountants to Tackle Higher-Value Work

Greater value means greater opportunity. As automated software steps up to handle more and more of the rote bookkeeping work that once occupied significant chunks of accounting professionals’ valued time, experienced accountants will have more opportunities to step into more valuable—and more interesting—roles.

Even as entry-level accounting work dries up, controllerships and plum consulting gigs are likely to proliferate, giving ambitious professionals ample opportunity to design firms’ financial architecture, best practices and financial analytics.

“There’s never been a more exciting time to work in this field,” says Cleaver. “Innovation has opened up new, once-unimaginable opportunities for aspiring financial professionals.”

Full-Service Payroll

Bookkeeper 360 reports on an exciting, long-overdue trend in the stodgy world of bookkeeping: full-service payroll.

The post singles out Gusto, a feature-rich automated bookkeeping platform, for its intuitive, labor-saving approach to financial drudgery: “This platform allows for automated pay runs and employee onboarding with data syncing directly to the Xero cloud in live time…[t]his automated feature instantly saves the small business owner from the hassles that come with payroll complexities and other compliance matters.”

Gusto isn’t the only online accounting and bookkeeping platform investing in more robust, feature-rich, convenient payroll applications. What was once a time-consuming and monotonous endeavor will increasingly be a straightforward, if not necessarily fun, exercise—that is, for accountants and bookkeepers willing to cede some responsibility to automated, technology-driven platforms that can organize payroll more efficiently and effectively than humans can.

Unruly Digital Footprints

The bring-your-own-device (BYOD) revolution has changed the workplace for the better—mostly. When employees take their devices home with them and freely commingle personal and professional activities on the same hard drive, they expose themselves and their employers to myriad security risks. When those employees store and access sensitive financial information on their devices, the risks increase many-fold.

This is a crucial consideration for accounting professionals charged with keeping their clients (or employers’) financial houses in order. Though accountants can’t be expected to become cybersecurity experts, they can take a simple, proactive step: implementing remote-wipe policies that allow lost or stolen devices’ hard drives to be erased from afar as soon as the loss or theft is discovered.

Don’t Fear the Unknown

Economic dislocation is the defining challenge of our time. It’s now inarguable that the profound changes of the past decade or two are not simply academic shifts best hashed out by eggheads in ivory towers. Collectively, and for better or worse, these changes threaten to undermine the economic status quo that has defined Western life since World War II. They shape our politics, threaten public health and foment social instability. We’re right to worry about what could—and, undoubtedly, will—be.

But that’s not an admonition to fear the future. Everyone with a stake in continued progress, from the accountants who keep international companies’ books in order to the artists who comment on the human condition, is a stakeholder now. Together, we can rise to the present challenge and shape a future of which we can all be proud. And, whatever that future lacks in density of human accountants, it can surely make up with a surfeit of creatives.