Each day you’re one step closer to retirement, but in the daily hustle and bustle of life, planning for the distant future can get lost in the shuffle. However, National Retirement Planning Month allows us to set aside time to focus on future financial plans. Whether you’ve started saving for retirement or are a little behind, this month is a time to check in and get on track for retirement success.
No one wants to envision being older, so it’s understandable you don’t want to think about retirement when you’re young. However, it’s essential to start saving as soon as possible, otherwise it’s easy to get off track until much later in life. With competing goals such as paying off student loans, saving for a home and having children to care for, saving for retirement may not seem like a priority—but it should be. Recognize there will always be something competing for your retirement dollars and you’ll have to make a concerted effort to be aware of your investment time horizon.
Set a Goal
Evaluate your monthly budget and figure out where you can set aside some funds for retirement. You don’t need to have a perfect plan in place right out of the gate, but set a goal to save a certain percent of your paycheck each month. Increase that amount by 1 to 2 percent each year until you’re saving between 10 to 15 percent of your take-home pay. If your company offers a matching program, be sure to contribute enough to receive your full free match. Check in on goals annually and make adjustments over time to help achieve your savings objective.
As you move from job to job throughout your career, it’s important to keep track of old retirement accounts. Having a few thousand dollars in an account may not seem like much now, but come time for retirement how you invest those funds can make all the difference. Speak with your investment advisor to better understand your rollover options for old retirement accounts. It may make sense to either consolidate to your current plan or move assets to an IRA. It’s critical to keep track of all funds throughout your working life. Many retirement plan providers have a dedicated service team to help simplify the consolidation process for you.
If you’re getting close to retirement and feel you’re behind, there are catch-up savings provisions for people who are age 50 and older. For 2018, workers can save an additional $6,000 per year in a 401(k) on top of the $18,500 annual limit for savings. If you’re still not feeling quite secure in your financial future, you can always work part-time in retirement to stay involved in the community and bridge an income gap you may have.
Whether retirement is far off or just around the corner, check in annually on your retirement savings progress. Preparing for an unknown future can be challenging, but not being prepared can make navigating retirement that much more daunting.
For additional information on financial or retirement planning, check out our additional BKD Thoughtware® articles or contact us.
BKD Wealth Advisors, LLC is an SEC registered investment adviser offering wealth management services for affluent families and investment consulting services for institutional clients and is a wholly owned subsidiary of BKD, LLP. The views are as of the date of this publication and are subject to change. Different types of investments involve varying risks, and it should not be assumed that future performance of any investment or investment strategy or any noninvestment-related content will equal historical performance level(s), be suitable for your individual situation or prove successful. A copy of BKD Wealth Advisors' current written disclosure statement is available upon request.