Continuing our Financial New Year's Resolutions series, today we are going to talk about retirement.
We all want to retire at some point. For some it might mean moving someplace sunny and warm or perhaps traveling around the world. For others it's sleeping late and hanging out with grand-kids. Whatever your retirement looks like or how close you are to that time, there are ways to kick it up a notch. Here are resolutions for 2016.
Game, set, MATCH One of the best things you can do for your retirement is take advantage of your employer matching program. If you work for a company that matches your contribution why the heck aren't you maxing out their match? It's basically free money. So here's your resolution, bump up your contributions to hit whatever your employer's max it. If you're currently contributing 4% but your employer matches up to 6% resolve to bump your contribution up 2%.
Give it a little more juice What we'd really like to see is you maxing out your retirement contributions. However if you're not quite in a position to save the max you can resolve to increase your monthly savings by 2-3%. Another strategy is to take it month by month. Start slow, focus on finding areas to decrease your spending, and work your way up to a target contribution. You can learn more about your contribution limits from the IRS website: IRA contribution limits 401(k) contribution limits
Muster up some courage Are you a bit risk averse? Are you maybe a little too risk averse? Now is a good time to evaluate your asset allocation and make sure you "Own Your Age." As you get closer to retirement, your portfolio should typically become more conservative but if retirement is still a ways off you can afford to take a more aggressive approach to growth. Use Wela's allocation tool to determine your OYA a get a recommended allocation. If you've been playing it safe now might be a good time to resolve to be a little more daring and add something new to the mix. This is certainly something you should talk to your financial advisor about before making any quick decisions though.
Seek professional help Not the lay-down-on-the-couch kind. The credentialed financial professional kind. You don't have to go at it alone. Make a resolution to find an advisor that suits your needs and has your best interest at heart. At the very least, an advisor can look over what you're currently doing and let you know if you're on track. For a long time, financial advisors primarily served the uber-wealthy but the rise of digital advisors like Wela allows the average American to access the same services. You can schedule a free 1 hour consultation with one of Wela's financial advisors and knock this resolution right out!
Home Sweet Totally Owned Home So you're a total retirement rock star and you're already maxing out your contributions, getting your company match, and using a financial advisor; what else can you be doing? You can get your mortgage paid off, especially if retirement is around the corner. If you can head into retirement with little to no debt you're in a good position. Determine your extra cash flow and make a resolution to start paying more than your monthly minimum to get your mortgage paid off before you retire.
Suggested New Years Resolution:
I will increase my 401(k) contribution to _____(X percentage)_____ by_____(Date)_____ . I will find a financial advisor I trust and set up a meeting by _____(date)_____.
Financial New Years Resolution Series: Part 1: Planning Your Resolutions – Where to Start Part 2: Organizing Your Finances Part 3: Creating A Budget Part 4: Pay Off Debt Part 5: Build an Emergency Reserve