Need a New Year’s Resolution?Submitted by Wealth Management Services Group LLC on January 10th, 2017
In a 2016 Gallup poll, 64 percent of Americans reported they were worried about retirement.1 It’s an understandable concern, as many workers haven’t saved nearly enough to fund a multi-decade retirement. Are you included in the nearly two-thirds of Americans who are worried about retirement? Have you given a less-than-ideal amount of attention to your retirement planning this year?
It’s not uncommon for people to get off track when it comes to saving for retirement. Life often tends to get in the way of our best intentions, and when child-related expenses, home repairs, medical bills and other costs pop up, they may take priority over saving for the future.
If your retirement plan isn’t as strong as you’d like it to be, don’t worry. It’s never too late to get back on track, and New Year’s is the perfect time to start that process. Below are three New Year’s resolutions to consider that may help you make 2017 the year you whip your retirement strategy into shape.
Become a habitual budgeter.
It may seem obvious that a budget can be a helpful tool to help you spend less and save more. Yet a Gallup poll found that two-thirds of Americans don’t use one.2 Budgeting can be tough to start, but once you get in the habit, it can have a substantial impact on your savings efforts.
To put it plainly, it’s impossible to know whether you’re on track without knowing where your money goes. When you use a budget, you can see how you spend your money and, more important, where you can make changes to improve your financial stability.
When you develop a budget, include retirement savings as a mandatory expense category. Pay yourself first, just as you would pay any other bill or monthly expense. This can help keep your retirement plan a priority. If you pay yourself regularly, you should see your savings balance climb quickly.
Get your debt under control.
Debt is a fact of life for many Americans. Often it can be used in productive ways, such as buying a home, funding an education or even starting a business. However, it can also be used in unproductive ways, and that can have a corrosive impact on your ability to save for retirement.
Keeping your debt load within a manageable range can be critical to the success of your retirement strategy. If you have excessive high-interest debt that isn’t tied to an asset, it may be time to get that debt under control.
Specifically, think about making 2017 the year you finally tackle your credit card balances. Call your card companies and ask for a lower interest rate. Consider consolidating that debt into a vehicle with a lower interest rate. Adjust your budget so you can pay down your credit cards faster.
Every dollar you pay toward credit card interest is a dollar that can’t be used to save for retirement. Tackle your high-interest debt this year so you can increase your savings level.
Minimize your exposure to catastrophic risk.
Life happens. Very often, unexpected misfortunes and emergencies can arise, bringing major costs and consequences to even the most disciplined financial plans. While you can’t predict every emergency, there are steps you can take to better prepare for such possibilities and to help prevent your retirement dreams from going down the drain.
Insurance is one critical way you can help protect yourself against catastrophic risks like property damage, disability, the need for long-term care or even early death. You may want to review your insurance plans to make sure you have a level of coverage that offers sufficient protection for you and your family.
Another strategy is to build up your savings or create a separate fund reserved for large-scale emergencies. That way you’ll be better prepared if you do find yourself facing major unexpected expenses. With an emergency reserve in place, you may not be forced to pause your savings efforts or even withdraw money from retirement accounts.
Want to learn more about how you can help ensure your retirement strategy is on the right track? Contact us at Wealth Management Services Group, and let’s start the conversation. We can help you analyze your needs and explore your options. This year, take charge of your financial future and give us a call today.