The path to retirement can often seem daunting, with the end goal appearing distant and difficult to reach. This sentiment has only grown in recent years, as indicated by a recent report on the Economic Well-Being of US Adults, conducted by the Federal Reserve.
According to the study, only 31% of non-retired Americans are confident in their retirement savings’ progress – a significant drop from 40% the previous year and the lowest since 2017. However, don’t be discouraged. There are various strategies you can adopt today to get your retirement savings back on track.
Capitalize on Company Match Programs
If your employer offers a 401(k) match, it’s crucial to contribute enough to secure the full match. It’s essentially “free” money that can exponentially boost your retirement savings over time. Remember, every dollar your employer contributes is a dollar less you need to save to meet your retirement goals.
Tailor Investments to Your Goals
Ensure your retirement savings are invested in alignment with your personal goals, time horizon, and risk tolerance. As you accumulate wealth, diversify your portfolio to balance potential risks and rewards. For those further from retirement age, consider placing a majority of your assets in broad-based, low-cost stock market index funds. These funds offer market exposure, reducing risk through diversification while promising a solid return over time.
Formulate a Comprehensive Plan
“Have a plan!” is not just a catchy phrase – it’s a fundamental piece of advice for retirement planning. Your plan should define your retirement goals, map out your financial journey towards those goals, and create a contingency plan for unexpected expenses or changes in income. Regularly revisit and revise your plan to keep your retirement savings on track.
Utilize Health Savings Accounts
Health Savings Accounts (HSAs) are an underutilized retirement saving tool. HSAs are triple tax-advantaged: contributions are tax-deductible, the funds grow tax-deferred, and withdrawals for qualifying medical expenses are tax-free.
The family deduction limit for 2023 is $7,750. In addition to your traditional retirement accounts, such as a 401(k) or IRA, consider incorporating an HSA into your retirement savings strategy.
Preserve Your Retirement Nest Egg
In challenging times, it can be tempting to tap into your retirement savings. However, it’s essential to remember that your retirement accounts are for the long term. To weather short-term financial difficulties, ensure you have an emergency fund separate from your retirement accounts. Compound interest is vital in retirement savings, and the larger your nest egg, the more it can grow over time. Therefore, avoid drawing from your retirement savings before you retire, if at all possible.
While the current landscape may seem challenging, remember that your journey to retirement is not a sprint but a marathon. Start by taking small, consistent steps, such as securing your company match and investing according to your goals.
Gradually, you’ll find your retirement savings back on track, steering you towards a comfortable and financially secure retirement.
Copyright © 2023 FMeX. All rights reserved. Distributed by Financial Media Exchange.
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Chase Lopez joined the ILG Financial team in 2020 as an advisor. Chase is a 2016 James Madison University graduate with a degree in management. Chase has been trained under the tutelage of Dave Lopez, who is not only the founder and managing member of ILG Financial, but also is Chase’s uncle and godfather. He also enjoys working alongside his cousin, Megan, who is Dave’s daughter. Chase, as a fiduciary, believes in putting his clients interests first, and building out plans for his clients where they can have a happy and fruitful retirement. He married his beautiful wife in February 2022 and both use most of their free time chasing around their little pup, Aurora.
Jessica Carson joined the ILG Financial team in 2018 as an agent. Jessica and her husband have four children, two dogs, 3 barn cats, 5 chickens, and three parakeets. She indeed loves her children and pets! When not at work, Jessica enjoys playing the piano and cello as well as traveling and spending time outside with her family, hiking, fishing, and boating.
Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.