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Resolutions: Small Changes Can Bring Big Impact for Retirement

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December 14, 2015
Resolutions to improve retirement planning

Ever hear this one? “There are only two money options in retirement. You’re either working for your money or your money is working for you.”

There’s no time like the sunset of one year and the dawn of the next for retirees to take a look at their stocks, bonds, funds, cash savings, and overall financial wellness. Resolve to consider some new-year changes that can help get you at least a few steps closer to retirement.

Time to Rebalance? As the calendar flips, it can be a good time for an annual assessment of your gains and losses, both realized and unrealized. Your investments likely shifted in value over the course of the year, and they may no longer be in line with your target asset allocations. For instance, late-year equity changes may leave you overvalued in certain stock sectors. Consult with your financial professional to see if you need an adjustment.

Get Real About Debt. You may not be spending as free and loose as you did in your younger days, but if you’re like most American households, your revolving credit is running at least a little higher than is desirable. Can you redouble efforts in the coming year to try to get debt-free once and for all? Credit cards, particularly those with high interest rates, can be a good first step to clearing the promissory decks. Can’t totally clean the slate? Consider chipping away at outstanding debt that is approaching the limit on some cards. That’s a likely twofer because you can shave off debt and protect—maybe even improve—your credit score. And a high score can help if you run into unexpected financial emergencies, especially in retirement.

Can You Bump Up Your Savings? This likely starts with a fresh look at expenses. Your needs and wants change with age—that’s a good thing. But are you spending just like you were a few years ago? Maybe it’s small stuff, such as subscriptions and memberships you no longer care about. But it extends to big expenditures, too. When was the last time you sat down and reassessed your insurance coverage? Can you bump up your savings target by at least 1% or more next year? And if you get a raise, a bonus, or some other windfall, consider diverting that new found money toward retirement savings.

Check In With Social Security. Have you ever scrutinized your Social Security standing? You can create an online account at socialsecurity.gov/myaccount to take a look at how much you’ve paid into Social Security and get a personalized estimate of how much you’ll receive in retirement. You might also begin to explore potential ways to increase your monthly payments when that magic date arrives. This can include delaying benefits.

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