A recent Gallup survey showed that 64 percent of Americans are worried about not having enough money for retirement.1 It’s an understandable concern given how easy it is to get off track. Costs like raising kids, home repairs and medicals bills can add up and make it difficult to save enough to meet your goals.
It’s that time again. A new year is finally here, and if you’re like many Americans, you might be thinking about making some resolutions. While it’s common to make resolutions to lose weight or improve work performance, you may want to consider a resolution to get your retirement planning back on track. That’s especially true if you’re nearing retirement.
It’s never too late to start working toward your retirement goals. Below are a couple of things you should think about doing in 2017:
Create a budget and use it.
To hit all your savings milestones, you need to know where you’re spending money and how much you’re spending. And without a budget it can be hard, if not impossible, to do that. Despite a budget’s helpfulness, only a third of Americans use one.2
When you create your budget, make sure you understand and identify the difference between essential and nonessential expenditures. There will always be things you need to spend money on, but if you understand how much you’re spending on nonessentials, then you’ll be able to cut back and put more toward your savings. You should also factor saving into your budget. It’s important to be sure to include paying yourself as an essential expense.
Reduce your high-interest debt.
Having too much debt can be a significant burden on your monthly expenses and can preclude you from saving as much as you need to. Not all debt is bad. Debt can be a useful tool to help you finance major life purchases such as a home or a car. It’s important to distinguish between useful debt and harmful debt, though. Just because you can borrow money doesn’t mean you should.
Have you relied on high-interest credit card debt in the past? If so, that debt may be restricting your ability to save. Every dollar that goes toward interest is a dollar that can’t be used for retirement. Make 2017 the year you finally get your credit card debt under control. Develop a repayment plan and stick to it. Also, look for ways to consolidate your debt into vehicles with lower interest rates so you can pay down the balance faster.
Plan for emergencies.
It’s great to have a solid retirement plan, but even the best plan can be disrupted by unexpected life events. If you haven’t protected yourself, you could find yourself in serious trouble. In addition to saving for retirement, you may want to think about creating a separate fund to pay for any emergencies that may crop up.
Since it’s a new year, you may also want to review your insurance coverage. If you’ve had major life changes in recent years, like marriage, children or career growth, you may need to adjust your protection. Review your life, disability and health insurance. If you’re nearing retirement, you may also want to look at long-term care insurance to help you cover future needs as you get older.
Ready to get your retirement planning back on track? Let’s talk about it. We welcome the opportunity to help you examine your needs and develop a strategy. Let’s connect soon and start the conversation.
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