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IRS Tax Forms 1099-INT and/or 1098 are included with your December 2022 banking statement. You may access a copy of your statement via online banking.

Re-Evaluating Retirement

If you have been following along with our Twelve Month’s To Financial Fitness, your day-to-day finances should be supercharging! Now it’s time to look at the fitness of your retirement. Are you saving enough? How much will you need? At what age can you retire? It can be stressful thinking about retirement with all of the unknowns, but we are here to help with that stress. By carefully analyzing your retirement accounts’ status, you can adjust what you need to while you still have time — no matter your age.

Don’t worry if you missed any of our previous articles in this series. You can still access them at any time. We are getting closer to the end of the year (and the end of the series), so make sure you don’t miss:

Analyzing Spending
Creating A Budget
Preparing For Taxes
Paying Down Credit Cards
Creating A Will
Storing And Protecting Sensitive Documents
Budgeting For The Holidays
Entertaining At Home
Why It’s Important
It’s no surprise that retirement planning is essential, yet many people have feelings of insecurity and confusion. Retirement should be something to look forward to, not dread. By figuring out what you will need and creating an actionable plan for the future, you will have achieved financial fitness. Social Security may not be enough or even available to everyone. Therefore, it’s important to forge ahead with your retirement savings and investments to ensure you will have the quality of life you desire during retirement. Below, we share how to go about re-evaluating (or maybe evaluating for the first time) your retirement plan.

Figure Out How Much You Have And Where Your Retirement Income Will Come From

As you start to take stock of your retirement funds, ask yourself these simple questions:

1) What accounts do I have that are dedicated to retirement? These may include union pensions, 401(k) plans, ROTH IRA’s or traditional IRA’s, miscellaneous investments, social security contributions, inheritances, simple savings accounts. List those accounts, the balances, and your monthly contributions. It is helpful to have this information handy not only for you but for your family members in the event of your death or incapacitation.

2) Am I maxing out my employer match funds in my 401(k)? If your employer offers contribution matching, determine how much you need to contribute each month to receive the full match to your accounts. If your budget does not allow for that high contribution, set a goal to increase your contributions each year until you reach that threshold.

3) Who is responsible for monitoring, servicing, and facilitating any investments? Some people set their investments to automatically invest in stocks and funds based on their acceptable risk level or based on their age and expected date of retirement. Some people choose to have an investment specialist manage their investments for maximum return. And some people decide to manage their investments; hand’s on. Whatever your style, do you feel comfortable with how your funds are being managed, or do you need to look elsewhere for help?

4) When do I want to retire? The amount you need to set aside each month is directly related to when you expect to retire and how much time you have left till that date. By identifying a goal date for yourself, you can determine the steps necessary to achieve it.

5) How do I want my retirement life to look? Some people choose to bring in supplemental income with part-time work after retirement. And others want to relax and enjoy their hard-earned freedom from the grind. Someone who plans to have at least some income during retirement may not need to save as much as someone who purely wants to live off their funds saved.

Do You Have Enough?
After you answer the questions above, you will know whether or not you are on track for retirement. However, certainty is better when it comes to retirement. You can have a better idea of your retirement needs and how to maximize your saving by talking to a financial advisor with expertise in retirement. Check with your employer or financial institution for any free resources that may be available. You can also do a simple calculation by finding an online calculator. You should also visit the Social Security Administration’s website to check their benefits calculator and learn more about your social security.

The Challenge
If you haven’t already, start this month’s challenge by asking yourself the questions outlined above. Then, find a retirement calculator or financial advisor to help you determine if you are on track to meet your retirement goals. Finally, take a look at your budget and set a goal to increase your retirement savings by at least 1% immediately, as well as a long-term goal to save more over time. Commit this plan to paper (or the Cloud) and regularly check back in to see if you are meeting those goals. Before you know it, your retirement fund will be healthier, and you will have less stress about the future.

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