As Mother Nature awakens from winter and ushers in the season of renewal, it’s an opportune time to rejuvenate your retirement savings strategy. Think of it as “spring cleaning” for your retirement plan – a time to reevaluate, reassess, and prepare for the seasons ahead. In this article, we’ll explore ways to strengthen your retirement savings strategy, offering insights into how to refresh your approach and take proactive steps toward securing a more comfortable retirement.
Assess Your Retirement Goals
Start the process of strengthening your retirement savings strategy by revisiting your retirement goals. Are they still aligned with your vision for the future? Consider whether any changes in your life circumstances or financial objectives warrant adjustments to your retirement goals. As you reassess, ensure your retirement aspirations remain clear and motivating. If you’re having difficulty with creating and clarifying actionable goals, try using the S.M.A.R.T. goals system.
Review and Adjust Contributions
Take a close look at your retirement contributions, whether you’re making them through employer-sponsored accounts or your own accounts. Are you contributing the maximum amount allowed? If not, consider increasing your contributions, especially if your financial situation allows for it. As your income may change over time, periodic evaluations of your contribution levels are crucial to ensure you’re on track to meet your retirement goals. If you cannot afford to max out your contributions but you have an employer match, make a great effort to contribute at least as much as it takes to get your full match.
Reevaluate Investment Allocation
Your investment portfolio plays a critical role in your retirement savings strategy. Market fluctuations can cause shifts in your portfolio’s allocation over time, so you can’t “set and forget” it. Spring is an excellent time to review your investment allocation and make any necessary adjustments. Ensure that your portfolio’s risk level aligns with your risk tolerance and time horizon. Consider diversification strategies that protect your investments from potential downturns while maximizing growth potential.
Explore Catch-Up Contributions
If you’re over the age of 50, catch-up contributions are an invaluable tool for accelerating your retirement savings. Certain retirement accounts, like IRAs and 401(k)s, offer catch-up contribution allowances beyond the standard limits. By taking advantage of these catch-up opportunities, you can boost your retirement savings and bridge any gaps in your retirement savings strategy.
Consolidate and Streamline
Over the years, you may have accumulated retirement accounts from various employers. Take this opportunity to consolidate your accounts, simplifying your retirement savings strategy. Consider rolling over old 401(k)s into an IRA or your current employer’s retirement plan. Consolidation not only makes tracking your savings easier but also provides greater control over your investment choices.
Review Beneficiary Designations
Life events like marriage, divorce, or the birth of children can impact your beneficiary designations. As you review and assess your retirement savings strategy, ensure that your retirement accounts and other assets have updated and accurate beneficiary information. Failing to review and update these designations could lead to unintended consequences in the event of your passing, especially because your will won’t override beneficiary designations. This makes it critical to keep them up to date and in line with your wishes.
Stay Informed
Renewing your retirement savings strategy shouldn’t be a one-time event. Rather, treat it as an ongoing commitment that you revisit at least once per year. Stay informed about changes in retirement laws, tax regulations, and investment opportunities. Regularly review your retirement plan and adjust it as needed to accommodate shifts in your financial situation or market conditions.
Do You Feel Confident About Your Retirement Savings Strategy?
Just as spring’s arrival brings a fresh start, spring cleaning your retirement savings strategy offers an opportunity to revitalize your financial future. By assessing your goals, adjusting contributions, reevaluating your investment allocation, exploring catch-up contributions, consolidating accounts, reviewing beneficiary designations, and staying informed, you can make proactive strides toward a more secure financial future.
If you don’t yet have a comprehensive retirement savings strategy in place, the Principal Preservation Services team can help. We specialize in helping our clients develop a personalized retirement savings roadmap and preserve their retirement assets for financial security and greater peace of mind. Contact us today to learn more about how we can serve your retirement planning needs!
