Refresh your retirement savings habits with a little spring cleaning! (Article)
Refresh your retirement savings habits with a little spring cleaning!
Spring seems to be the time of year that us Americans designate for tackling some of those pesky annual chores. Whether it be inside or out, we set aside the time get the work done! So, why not do the same with our retirement plan?
Here are some items we can focus on to really help us reach retirement successfully!
- Be consistent with your savings! Start as early as you can, pick a savings rate and stick with it. As your budget allows, increase it (your retirement plan can help here with automated increases you can activate) and have a goal of 10% to 15%. Once you reach your savings rate goal, don’t adjust it. You can always increase, but unless you have a financial emergency, don’t reduce it! Remember that time is our greatest friend when we’re saving for retirement.
- Have an asset allocation strategy. Have a what? All that means, is have a plan for your investments. Everyone has difficult risk tolerances and goals. Not sure where to start? This is a great conversation to have with your MoneyAdvice@Work Advisor! Generally speaking, a target date fund is going to be a great investment option for you! This is an investment option that roughly correlates with the year you expect to retire, is diversified, and rebalances automatically. Rebalancing is simply realigning your investments back to the initial weights you set in your account or portfolio as the gains and losses of the different mutual funds cause that allocation to fluctuate. If you are utilizing a more custom investment strategy, make sure to set up automatic annual rebalancing!
- Focus on tax beneficial accounts. Yes, there are a variety of options when it comes to saving and investing, but you really want to focus your savings on accounts where there are tax benefits. Primarily qualified retirement plans, like a 401(k), or IRAs (individual retirement accounts). In bank savings accounts, we should only be putting our emergency savings – 6 months of living expenses.
- Always make sure your beneficiaries are up to date: It can’t be stressed enough how important it is to have updated beneficiaries on file should anything happen to you. Make sure you check in on this at least annually.
You’re Just Getting Started
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