Starting to save for retirement is an important first step toward achieving your goals. That said, retirement planning can seem overwhelming at times. The timeframe is long, and the future seems unclear. As you create a plan and develop your investment portfolio, however, you’ll see how having a solid plan can make you feel more confident about the future and ensure that you have attractive options available to you.
Creating a plan is just the first step, however. After you have a plan in place there are still actions you should take on a regular basis to keep you on the right track, steadily pressing forward to your ultimate goal: a successful retirement. The following tips can help you to keep your retirement on track.
Review Your Plan Annually
It’s a good idea to review your retirement portfolio at least once a year. If you’re working with a financial adviser, get together annually to review your goals and see if you’re still on track to reach them. Circumstances can change, and you may need to make adjustments to your plan from time to time.Additions to your family, changes in goals, and even changes in health can make a difference in how much you need to save and how you want to invest. Annual reviews give you a set time to take all of these factors into consideration and make sure you stay on track. During times of major life changes or uncertainty in the stock market may warrant more frequent reviews of your plan, perhaps quarterly or an interval that feels right to you.
Rebalance as Necessary
Buying and holding can be a tried-and-true strategy for investment portfolios aimed at retirement, but that doesn’t mean you shouldn’t rebalance occasionally. In fact, making changes in your investments could be crucial for keeping you on track to meet your retirement planning goals. For example, you may find that over the years your investments become heavily tipped into one sector. This makes you vulnerable to crashes in that particular sector. If you find yourself in a situation like this, you’ll want to review your investments and keep your investments diversified.
Evaluate Your Contribution Level
How much are you contributing to your retirement account? Are you contributing the maximum for your age group? Are you claiming any employer contributions that could be coming your way? Once you turn fifty, you can make additional tax-free contributions, and this can be very helpful, especially if you have some catching up to do. If you’re not sure how much you’re currently contributing or what your company plan offers, check with your human resources specialist. If you’re not sure if you’re contributing enough to reach your retirement goals, talk with your financial adviser.
Resist the Temptation to Buy and Sell Too Often
When it comes to investing in the stock market, it’s best to take a few steps back and look at the big picture. When you look at the day-to-day ups and downs, it can appear that the market is a tumultuous storm of highs and lows! But when you take a step back and look at the long-term trends, you gain a wider perspective.
Try to resist the temptation to sell as soon as you see signs of daily troubles. Stick to your plan, and if you have concerns, talk with your financial advisor before making any rash decisions.
Consider Inflation
Do you ever find yourself saying “When I was a kid, a dozen eggs cost $.35”? Inflation keeps the cost of living continually shifting upward. Eggs and other staples are likely going to cost more after you retire than they do now. Are you going to be able to buy them with your retirement savings?Your retirement plan needs to take inflation into consideration. Most financial experts estimate that the cost of living increases by about 3 percent per year. Therefore, your investments need to keep pace with inflation. Talk with your financial adviser about which investments will work best in your portfolio for providing for your future needs, inflation included.
Wherever you are in your retirement planning, it’s not too late to make improvements and stay on track. Worrying won’t help much, but starting planning today to make any needed changes certainly will. Our Wealth Managers would be happy to discuss your retirement planning strategy with you or answer any questions. Contact us here or give us a call at 1-800-541-7774.
