No matter where you are in your working life or what your retirement goals are, the new year is a great time to review your current investment strategy and make adjustments. As with any future planning project, there are things you can manage easily and factors that are beyond your control.
Maximize Your Company Plan Investment in You
Getting an investment match for your company is a bonus that you should not ignore. Invest at least enough in your company’s 401(k) or similar retirement vehicle so you can gain the full benefit. If you’re a careful investor, consider this match as play money. Put your money into funds that offer steady returns and put the employer match into more volatile investments.
Check Out Your Social Security
It’s well-known that social security will not provide any of us enough to live on in retirement, but we can map out our future benefits and include them in our retirement calculations. How much will you make from social security if you take it early? Can you work until you can get the full benefit? The payout can vary widely depending on when you take it, so it’s important to set up a timeline.
Monitor the Requirements
At 65 you must check in with Medicare, and if you don’t there may be penalties to pay. At 70.5, you must take required minimum deductions from your retirement accounts. Even if you plan to keep working for as long as possible, the monetary penalties for ignoring these requirements can be steep. To avoid having to pull money out of your investments to cover penalties, make sure to check out these requirements as you hit milestone years such as 65 and 70.
Legacy Considerations
In addition to mapping out your money needs in retirement, it’s a good idea to consider what you will leave behind. If you plan to set up any funding for family or charities that are important to you after you’re gone, you will want to set these up now. Simple contributions, if started early, can build into substantial donations over time.
The New Year is a time to celebrate and reconsider your goals. Improvements in your health and habits can be a great way to invest in your future. As you consider resolutions you can focus on, make sure to consider your retirement goals.
Dil Bole Oberoi
