For years, retirement may have seemed like a faraway milestone. But if you’re looking toward retirement in the next several years, now is a good time to make sure you’re on track financially before arriving at the next chapter in life.
Ready to get your finances in order before your golden years? Here are a few key steps to take.
- Get a snapshot of your overall financial picture.
When retirement is a distant dream, many people take a set-it-and-forget-it approach to saving. Some people max out their IRAs each year like clockwork; others make automatic payroll deductions to an employer-sponsored retirement savings plan. But now that retirement is close, it’s time to take your savings strategy off the backburner. Before long, you will likely begin dipping into the funds you’ve set aside.
Assess your financial position with online tools like WaterStone Bank’s Retirement Planner Calculator. This calculator can help you determine how long your savings will last into retirement while taking many factors into account, such as pay increases, the rate of return on your investments and the rate of inflation.
Other tools, like the Retirement Income Calculator, can help you visualize what your lump retirement savings will look like when split into monthly payments.
Explore the rest of WaterStone Bank’s financial calculators to start looking at how your savings stack up against your needs in the future.
- Optimize your investments.
If you’re used to making high-risk, high-reward investments with your retirement savings, now may be the time to shift to a more conservative strategy—think low-risk bonds and high-yield savings accounts instead of hedge funds and crypto.
Also, take note: If you’ve invested any of your retirement savings in target-date funds, those investments will automatically begin to shift toward a more conservative strategy as you get closer to retirement age.
As retirement nears, it’s important to protect the money you’ve saved and the interest you’ve earned over the years. A financial professional can help ensure your investment strategy is appropriate for your stage in life.
- Bolster your nest egg.
Consider contributing as much as you can to your retirement accounts, then start thinking outside the box about other ways to save.
One way to save more is by making catch-up contributions to your 401(k) plan after you reach age 50. Not all plans allow catch-up contributions, so ask a plan administrator for details about your plan’s rules.
If you aren’t already contributing to an IRA, now could also be a good time to open one, if you qualify. You can also look beyond retirement accounts into other retirement savings options, like traditional brokerage accounts, Health Savings Accounts and high-yield savings accounts. Every little bit you save can provide peace of mind and security when you’re ready to retire.
- Work with a financial professional.
Preparing for retirement is no small feat. But when it comes to managing your money, an investment professional can help. Reach out to the team at WaterStone Investment Services for one-on-one guidance to make sure you’re situated for a secure future in the years to come.