24. December 2013 09:49
The holiday season is a time for reflection over the past year and planning for the future. At this time, take a moment to think about the state of your retirement portfolio.
Just as you make resolutions to lose weight or exercise, also commit to making a change in your financial health. Don't be vague - "I will operate off of a budget this year" or "I will save more" - but focus on specific retirement goals. Paying more attention to your financial future is a great gift to give yourself.
Here are a few New Year's resolutions to consider for 2014:
- If you are not taking advantage of your employer's 401(k) plan, do it now. The tax savings alone offered by a 401(k) plan are something you shouldn't pass up. Any matching contribution provided by your employer is essentially free money. It is important to you and your retirement to take it.
- If you are not getting the maximum matching funds from your employer, do so. Again, don't leave free money on the table. If your employer makes matching contributions, make sure you contribute enough to take full avantage of their offer.
- Make a commitment to increase your savings rate by one to two percent of your salary each year. Even a slight increase of 1% or 2% can really add up. If you get a salary increase at the end of the year, take the opportunity to make the change now. Do it before you see the salary increase and you won't miss the difference.
- Recognize that your retirement savings investment strategy is just as important as your savings strategy. The types of investments you choose and your asset allocation play a key role in determning your eventual nest egg. Use online planning tools and enlist the help of a financial professional.
- Be realistic in terms of what you will need to save, and take advantage of financial planning tools to guide you. Startling statistic - the average American spends 20 years in retirement. Realistically, it will require 70 - 80% of your preretirement income to maintain your standard of living when you stop working. To achieve financial security, plan ahead.
For help with your financial planning needs, contact an Austin Bank Financial Services representative. They would be happy to discuss your options and help you plan for your needs.