Average Speed

About 200 million Americans want to write a book, according to Publishing Perspectives. Typing 50,000 words into a cohesive story seems to be an impossible task. Only the individuals with the ability to disappear into a cabin in the woods have the opportunity to become a published author.

Making the long journey to accumulate a retirement nest egg large enough to replace your working income is also daunting. So much so that many workers fail to even start, or do so at a snail’s pace.

Writing a book and saving for retirement have one thing in common. They both require maintaining a sustainable average speed.

What do I mean by average speed? It is the average pace you maintain day after day as you work toward your goal. For writers, it comes down to the number of words you write daily. Retirement savers can focus on the amount saved monthly for retirement. The benefit is this: small actions repeated consistently turn into major accomplishments.

Business owner and author Donald Miller once provided this tip to aspiring authors in an Instagram Story--write 500 words every day for 100 days. There’s your 50,000 word, or 200 page, book. This breaks down a huge goal into a manageable daily task, writing about 2 pages per day.

Focusing on maintaining a sustainable average speed is the best approach to saving for retirement, as well. Extreme frugality may help cut your spending for a short period of time, but is unlikely to be a good long-term strategy. Excessive spending is a recipe for consumer debt and an unfunded retirement account.

Regardless of how well you monitor your spending and saving, unexpected events are bound to happen. Your HVAC system fails during a winter cold snap. An uninsured medical expense must also be paid at a moment’s notice.

What matters most over the course of your career is maintaining a high average speed toward retirement. Here are a few ways to make sure you keep your average savings rate high over the years:

Invest during the good times. Even if you have a salary, you are bound to have better income years than others. Receive an unexpected bonus or inheritance? Use it to pay off any lingering debts or invest it in your retirement account.

Gift to a donor-advised fund. Charitably inclined? During your years of higher income or lower expenses, contribute to a DAF. This allows you to make a one-time charitable gift, but spread out the gift to the end-charity of choice over time. As an added perk, the lump sum gift may put you over the standard deduction threshold so your contribution is tax-deductible.

Slow down during the lean times. Find yourself living paycheck to paycheck? Consider cutting back on your retirement contributions to make sure your financial foundation is set. Refill your emergency fund to help avoid consumer debts. An important aspect of maintaining a high average speed is to not come to a crashing halt.

Make sure you are properly insured. As a working professional, one of your largest assets is your ability to earn a future income. This is also known as your human capital. Protect this asset with disability insurance. Even the best financial plans will fall short with an abrupt stop in income.