7 ideas to get your retirement savings on track

7 Ideas to Get Retirement Savings on Track

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Planning for retirement by implementing appropriate retirement savings strategies can help you be more financially secure when you retire. It’s essential to realize that saving for retirement happens over time through varying market performance cycles and specific actions that you take. Here are seven ideas to get your retirement savings on track:

1. Have a financial plan completed

Meet your financial professional for a financial planning meeting and have a financial plan completed or updated. A financial plan is crucial because it provides a roadmap to determine if your risk tolerance, asset allocations, and timeline until retirement are still on target. A financial plan can help you focus on boosting your retirement savings in the New Year.

2. Get your employer’s matching dollars

Contribute enough to your employer’s plan to receive a matching contribution (commonly a 2-4% match). You may have the option to contribute to pre-tax and after-tax retirement savings accounts and choose where to apply your employer’s match. Ensure you’re not throwing away ‘free money’ by contributing less than the minimum required by checking your contribution amount and employer retirement plan documents.

3. maximize your retirement savings contributions

If you’re over 50, the IRS allows you to contribute more through catch-up provisions for your pre-tax and after-tax retirement savings accounts. Check with your financial professional for the New Year’s Roth IRA, IRA, 401(k), 403(b), and 457 plan contribution limits if you intend to save more by maxing out your contribution limits.

4. Fund a roth iRA

Roth IRAs fund with after-tax contributions, so you pay taxes upfront. When you take distributions, both the contribution and accumulation are tax-free. However, the IRS ‘five-year rule’ says you cannot withdraw earnings tax-free or without a 10% penalty before age 59 1/2 or until at least five years since you made your first contribution to the account.

Anyone can open a Roth IRA at any age, as long as they have income. But income limits apply and can vary from year to year. Reach out to your financial and tax professionals to determine if you are eligible to contribute and the contribution limits for this year.

5. assess your portfolio’s risk and allocations

Meet with your financial professional to determine if your risk tolerance and portfolio allocations are appropriate for your situation. Having 100% of your retirement savings tied to stock market performance may not be suitable for you, but all of it outside the market may not be. Your financial professional will assess your timeline, performance, how inflation may impact your retirement savings and other factors as they work towards evaluating your portfolio.

6. consider other retirement savings strategies

Different strategies that you can contribute towards now can be used to fund your retirement income later, such as:

Fixed-indexed annuities are contracts purchased directly from an insurance company or a financial institution. Annuities are bought with a one-time or series of payments over time. If you have retirement savings plans from past employers, you can use the value to purchase an annuity. Some features of annuities include:

  • Provide income for life
  • Protect against market risk- the initial investment and accumulation are protected when the market declines
  • Annuities offer tax efficiency while they grow
  • Lock in gains based on market performance

Life Insurance can be used for retirement income when you borrow against the policy’s cash value (without tax consequences) to supplement your retirement. You will still have some remaining death benefits if you don’t use all of the cash value or surrender the policy. Talk to your insurance professional to understand the details of using life insurance for retirement funding and how it may or may not be an option for you, depending on your unique situation.

7. engage in tax planning

Part of your retirement savings should be in tax-sheltered accounts. Review your portfolio and each investment strategy with your financial and tax professionals to ensure you are not overpaying taxes. They can also help you prepare for taxes in retirement when you start taking distributions from your retirement savings.

Talk to us today

To better understand your financial plan, and to determine if you’re on the right path to retirement, visit with your financial professional. Contact us today!

© 2024 Trajan® Wealth LLC. Nothing in this blog is intended as investment advice, nor is it an offer to buy or sell any security. Please consult your financial advisor for questions about your personal financial situation. All investments involve risk, including the potential for loss. Trajan Wealth clients and employees may have a position in any of the securities mentioned. Portfolio holdings and other data are subject to change at any time and without notice. Additionally, the above links provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. These materials are for informational and educational purposes and are not designed, nor intended, to apply to any person’s individual circumstances. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. Please consult with your legal and/or tax advisor before making any tax-related decisions.