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One Bullet-Proof Way to Boost Retirement Savings

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Who wants to save for retirement when the stock-market looks like a buoy in the middle of a hurricane? It's been tough this year as oil prices, the threat of a global slowdown and sluggishness in Europe have weighed on stock prices.

While I've argued many times that you should be investing consistently over time -- and not timing the market -- it's hard to do this in practice. But there is one way of taking your brain out of the game of investing.

If you don't have to make a decision of when to invest, you'll not only build your savings, you will get stocks when they are at lower prices. Buy low and hold automatically. It works over time. "Auto-pilot" saving not only builds your nest egg, it builds confidence.

According to a survey by New York Life, "nearly two in three (64%) report that this type of saving gives them more confidence heading into retirement than other forms of savings."

Why does auto saving work? It's like your tap water. Barring any major emergency (like a water main breaking), it's always on. You don't think about it and it serves your needs. You don't have to guess when a bull market begins or a bear market ends. With this year's volatility in stocks, this is a welcome respite.

How to Do It

This "auto-pilot" plan works if you have automatic enrollment in your company's 401(k). But you can also set up such a plan in your individual retirement accounts or small-business plan.

Just tell your bank or mutual fund company to automatically deduct money from your savings or checking account each month. That way you don't have to fret about whether you are investing "at the right time." It takes the mis-timing decision out of your hands.

If you're investing in your company's 401(k), you can tell your employer how much you want deducted every month. Remember that any 401(k) contribution reduces your federal income tax liability.

Direct-deposit plans also work for college savings and non-retirement needs. You'll need an emergency fund, for example, to cover healthcare, out-of-pocket insurance expenses and things that break.

For this rainy-day fund, you can auto-debit a checking account and put the money into a money-market account. You won't earn much interest, but it will be there when you need it -- and you won't spend it.

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