Every January millions of Americans make resolutions. This year, make one of your goals to plan for a happier, more successful retirement. Here are steps you can take to achieve financial and emotional fulfillment as you plan for the next big chapter in your life.
Put your savings on autopilot.
If you don’t have them made already, create automatic deductions from your paycheck into your retirement accounts, says Emily Guy Birken, author of Choose Your Retirement: Find the Right Path to Your New Adventure. “You want it so the choice is taken out of your hands,” she says. Otherwise, you’re likely to spend the money you had intended to put toward retirement. Birken also recommends increasing your retirement savings by 1 percent—enough to make a dent but not enough to kill your budget. Want to really kick your retirement resolutions into high gear? Set those automatic contributions so that every three months they go up by another 1 percent. And if you’re expecting a bonus in the coming months, send that money straight into your 401(k). It’s the perfect time to max out your yearly contributions.
Think about what makes you happy.
“The New Year is a good time to reflect on what brought you satisfaction in the previous year,” says Birken. And when it comes to tightening your budget to free up cash for retirement savings, look first at the spending that brought you the most joy. “Then you can decide to cut out the activities that didn’t really make you happy in the first place,” says Birken. COVID-19 changed our routines, but if the highlight of your week was going out to dinner with your family or spending Sunday woodworking in the garage, keep your dining tab and hobby expenses in the budget. But if you loathe going to the gym or couldn’t care less about your garden, those are the costs that you can more easily cut back on. Carving out a place in your budget for the activities you love is important as you work toward your goals because it allows you to further explore what will bring you joy in retirement.
Make a date.
As you set your new year's resolutions, also be sure to make at least one appointment with your financial professional for three months from now. This way you can review the progress of your financial resolutions and see how close you are to reaching your overall retirement goals. And if you’ve gone offtrack, you still have plenty of time left in the year to correct your course.