We’ve all been through a lot in the past few years, first with the pandemic, now with record inflation and talk of a looming recession. So it’s no surprise that people aren’t optimistic about their chances of retiring comfortably right now. Nearly one in five workers don’t feel they can afford the retirement lifestyle they want, according to BlackRock, and another five aren’t sure if they can save enough.
If you belong to either group, it is normal to feel nervous. But there may be a way to get things back on track. Try to do the following.
Find out what it means to be on the right track
There are some reasons why you may feel that you are not on your right track retirement plans. You may have a monthly savings goal that you know you won’t meet. Or you may not know exactly how much you need to retire at all.
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In the latter case, the first step is to create a retirement plan so that you know exactly how much you need to save. There are several ways you can do this. One strategy is to save 25 times your annual income. This should help your money last for at least 30 years. You can also create a customized retirement plan based on how long you expect to live, how much you think you’ll spend annually, and how fast your investments are growing. a retirement calculator It can take all of this information and help you set a good savings goal.
Evaluate what you have
The next step is to write down what you already have. This includes retirement savings in workplace retirement plans, IRAs, Health Savings Accounts (HSAs), and anywhere else. Don’t forget about retirement accounts with previous employers, too. Write down all of their balances and what they invest in.
Note how much time you have until your planned retirement date as well, and keep track of how much money you contribute regularly for retirement. If you won a 401(k) match from your employer, record that as well. You will need this information to formulate your new retirement plan.
Rethink your retirement savings strategy
Take a look at all the information you’ve collected to see if there are any obvious changes that could help you. For example, maybe you can roll old coins 401(k) In an IRA, where you can invest it at a reasonable price index box Instead of the costly mutual fund it currently has. This can save you money on fees, and potentially improve your returns.
Or, you can put more money in your 401(k) instead of your IRA if you haven’t been demanding enough to get a perfect employer match in the past. If you don’t have access to a 401(k), you might consider opening an HSA and throwing a large portion of your retirement savings there to supplement your IRA.
Of course, sometimes the only solution is to get more money in your account retirement accounts. In this case, you can try to cut some other expenses or negotiate an increase in work. Also look for other better paying job opportunities.
When All Else Fails, Delay Retirement
If you can’t make your current retirement plan work, it’s time to change your plan. You may not want to delay retirement, but it’s a better option than retiring anyway and squeezing pennies until your savings run out.
You may not have to delay retirement for long, either. Even a few months can make a big difference. It gives you extra time to save, but it also shortens the length of your retirement and reduces its cost.
Each person’s situation is unique, so it is ultimately up to you to decide how long you want to work. But try to stick with it until you feel completely confident that you have the money to cover your basic expenses.
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