3 Signs You Should Review Your Retirement Plan This Year
Most people made some New Year’s resolutions last month, but many of them may already have fallen by the wayside by now.
However, one important thing you don’t want to forget about is retirement planning. Before the months slip by and you find yourself another year closer to retirement, take the time to reassess your plan and make appropriate changes to boost your financial stability this year and keep you on course for a secure and comfortable retirement.
If you went through any major life changes in 2016, you may have an even greater need to review your retirement planning this year. Below are a few life events that can impact your ability to save and your future retirement needs. If any of these events sound familiar, it might be time to take steps to get your savings plan back on track.
1.) You had a change in marital status.
Marriage is always a joyous occasion. If you got married in 2016, you and your new spouse may still be basking in the honeymoon glow. However, it’s never too soon to start thinking about your new financial future together.
On one hand, marriage can improve your finances and your prospects for retirement. Your spouse may bring significant retirement assets to the marriage and possibly a second income stream that will help boost savings. On the other hand, your spouse could also bring debt, undisciplined spending or even high-cost dependents to the marriage.
Either scenario represents a change to the status quo and warrants a review of your planning efforts. Take time to sit down with your new spouse, discuss your shared plans for retirement and develop a savings strategy to make your goals a reality.
If you got divorced, then you’ll probably have a whole different set of issues to deal with. For instance, you may be facing high support payments that limit your ability to save. Or you may have lost much of your retirement assets in the settlement. It’s also possible that you had to put your career on hold while married and that you’re now faced with building your own career and retirement nest egg. In either case, the sooner you adjust your plans, the more options you may have available to re-establish financial stability.
2.) You have a new job.
Congratulations! Embarking on a new job can be exciting. It often means an increase in pay, an expansion of responsibilities and new opportunities. You may be busy adjusting to your new role and your new employer.
However, don’t forget to review how the job change has impacted your retirement planning. For example, your new company likely offers a 401(k) or other retirement accounts. Are you taking advantage of those opportunities – or are there other opportunities you should explore instead that you may not have considered? You may want to consult with a qualified financial advisor to make sure you are saving in the best places for future retirement security.
Also, if your new role came with a significant raise, consider how you can use that increased income to fund your retirement. Often when people get raises, they tend to expand their lifestyle and increase their spending to match their raise. Instead, create a budget so you can keep your spending in check and put your increased cash flow toward saving for the future.
3.) You became an empty-nester.
It can be bittersweet seeing your kids move out of the house and go on to start their lives. While it might be sad to see them go, it can also mean that you now have more discretionary income. This might be a good time to look into increasing your savings rate now that you don’t have to worry about supporting children.
You might also be able to take advantage of catch-up contributions to your retirement accounts. People who are age 50 or older are allowed to contribute additional funds to retirement savings accounts like 401(k) plans, traditional IRAs and Roth IRAs.1 Look for ways to increase your savings and take advantage of these raised contribution thresholds – or explore less traditional investments with less market volatility, such as annuities or high cash-value life insurance accounts.
Ready to get your retirement planning back on track? Let’s talk about it! Contact us today, or call 614-536-0088. We welcome the opportunity to help you examine your needs and develop a strategy. Let’s connect soon and start the conversation.
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