Ladenburg Thalmann Asset Management CEO Phil Blancato shares his advice on how to save for the golden years.
Professional soccer player Rob Gronkowski did the unthinkable: he saved all his NFL career earnings, lived off sponsorship money and retired for the first time at 29. Over the course of his career, he has won almost $ 60 million from his NFL contracts according to Spotrac and, unlike many players, he has built himself a beautiful nest egg in the years to come.
Although Gronkowski, known by the nickname “Gronk”, is a famous football player who has been blessed with multi-million dollar contracts, his savings strategy is so simple that anyone can emulate it to achieve his retirement goals. Whether you are low on retirement savings or just want to increase your portfolio, these tips will allow you to claim retirement victory sooner than you think.
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The game plan
All big goals start with a plan, and the first step you can take to crush your retirement goals is to start saving. Allocate as much of your earnings as possible to your savings accounts. Do not be content to save just 10% to 20% of your earnings just because this is the standard path everyone follows. If you can save more, go ahead. If you can’t save a lot now, put yourself in a position where you can easily increase your savings rate one quarter at a time.
Gronk’s winning strategy, however, did not require complex formulas and calculations. “Keep it easy, and I would say it’s simple,” said Gronkowski in an interview with Business Insider in 2019. “Take what you need to be comfortable, save the extra.”
To save more, you typically need to increase your revenue or decrease your expenses. But if you’re like Gronkowski, you can accept the challenge of doing both to accelerate your progress.
In his 2015 book, It’s Good to Be Gronk, Gronkowski shares the habits that helped him maintain a considerable income. “Look, to this day, I haven’t touched a penny of my NFL signing bonus money or contract money yet,” wrote the Patriots ex-tight end. “I live on my marketing money and didn’t spend a lot of money on expensive cars, expensive jewelry or tattoos. Gee, I still wear my favorite high school jeans.”
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Face your goals like a professional
Gronkowski saved every penny of the money he received during his career in the NFL and only touched his sponsorship earnings. He did business with popular brands like Nike, Dunkin ‘, Cheerios, Tide and others that helped to finance his lifestyle.
But if you can’t take advantage of all the glamorous sponsorship offers that Gronkowski has received, don’t worry. There are advantages that everyone can take advantage of at all income levels to help them achieve their goals.
For example, after you start saving, you can use a portion of your funds to maximize your Roth IRA each year to accumulate tax-free income during retirement. The key here is to invest the money in your retirement account to get big returns. The IRS will even give you a bonus – the saver’s credit – for saving for retirement, which can put up to $ 1,000 or $ 2,000 back in your pockets in 2021, if you have a modest income.
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For those who have earned a lot of money to contribute to a Roth IRA, check out the traditional IRA. It is a tax advantage account that offers deductions that you can use immediately to reduce your taxable income. Don’t forget to look at employer-sponsored retirement plans, such as a 401 (k), which can give you an additional boost to accelerate your savings goals.
If all else fails, at the very least, you can always catch a side show or earn an extra stream of passive income that you can save exclusively for your retirement needs. Having multiple sources of income makes it easier to save.
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The retirement touchdown
Gronkowski is not only winning on the football field, but he is also saving for retirement, one game at a time. Your moves on the field prove it: there is always a winning move you can make, no matter where you are.
If you apply the same mindset to your retirement strategy, you are one step closer to scoring a touchdown on your savings. You may not wake up with millions of dollars overnight, but there is no doubt that Gronk’s strategy will allow you to have a healthy income to live the life you want now and in old age.