With the New Year right around the corner, many people are making financial resolutions. When it comes to long-term savings, putting more money aside for retirement is a top resolution.
Here are some practical steps you can take to stick to your resolution to save more and improve your chances of a happy retirement.
Start Saving: Try and contribute 15% of your pre-tax income to retirement savings.
Reduce your debt: It’ll be easier to save money for retirement and to live comfortably once you get there if you reduce your debt now. While there are multiple ways to approach debt repayment, starting with the account with the lowest balance can help increase your momentum which makes you feel good and builds confidence.
Diversify your retirement income: It’s important to have money coming from multiple sources in retirement. That may mean having some money in stocks, traditional retirement accounts and fixed accounts.
Stop stressing about the stock market: We often hear people wondering if “now” is the right time to get into the market. The answer is always yes, particularly when you have a long-time horizon. Rather than worrying about whether the timing is right, people should be investing as soon as possible to maximize their gains by retirement.
Build an emergency fund: One way to eliminate stock market worries is to build an emergency fund. So if something happens, you’re not tapping into your retirement fund. Should the market tumble right as you retire, you may be able to ride out the downturn by using money from the emergency fund.
Bring down your cost of living: From easy changes like switching from high-end brands to regular brands to more extreme options such as selling the house, reducing your cost of living can be a good way to free up money for retirement. Lifestyle adjustments can seem overwhelming, but it doesn’t have to be permanent for the rest of your life.
Start saving for healthcare: Healthcare expenses in retirement can be a scary unknown for some people. Those with an eligible high deductible health insurance plan can start preparing by placing money in a health savings account, but everyone can take steps to avoid chronic illnesses and other medical conditions. Saving for health care expenses is a very tangible thing you can do, but also manage your health.
Invest in yourself: While they may not seem like money moves, taking time to hone skills, expand education and network with colleagues can all pay dividends. Doing so may lead to a better job and income, which can translate into more money for retirement.
Make an appointment with a planner: Meeting with a financial professional is another smart strategy to help you meet your retirement savings goals for 2017. It’s so important to get the right kind of guidance, as small tweaks can lead to large gains. Professional advice may be just what you need to pinpoint exactly how to make the coming year the one in which your retirement savings plan falls into place.