There’s nothing better than a brand new year full of fresh starts, endless opportunities and goals to be made! Like many people you’re probably making a few resolutions to make this year your best one yet whether that’s making healthier food choices, exercising, reducing stress or spending more time with family. But what about your finances and retirement? Have you considered getting those areas of your life back on track?
Whether you’re just starting out in your career or you’re nearing retirement, the decisions you make now directly impact your future which is why making tangible goals to get your finances back on track is critical!
1. First make your goals SMART
Before you begin setting any goal, whether it’s getting back on track with your financial planning or planning for your golden years of retirement, using the SMART strategy acronym will help!
Specific: You know exactly what you plan to do.
Measurable: You’ll know precisely when you’ve achieved your goal.
Attainable: Your goal may be challenging but you have the tools and abilities needed to reach it.
Relevant: Your goal is important and meaningful to you.
Time-bound: You have a specific time frame for meeting your goal.
2. Ask the hard questions like, “Will you outlive your money?”
This is everyone’s concern as no one wants to outlive what they’ve saved but with more Americans living longer lives, calculating what you need to survive is one of the most important tasks you can complete. Take a look at your spending and income with a close eye on fixed costs like rent. Do you have a savings account? Do you have credit card debt and if so, what are the interest rates? Do you have an emergency fund set aside or would a huge car repair, or a job loss, put you in a serious situation? Doing a deep dive into personal finance will do you a world of good to determine where you are now and what your financial future may hold. Consider engaging with a financial representative to help you get back on track if you’re finding your spending is preventing you from developing a savings plan.
3. Make a retirement plan ASAP
Many people find the topic of retirement to be complex and hard to understand but to ignore it can have significant consequences. Consider this, by the year 2090 nearly half of retirees won’t have enough income to support themselves. Sure, that’s a long way off but it’s a sobering consideration.
According to the Urban Institute October 2021 research report, Preparing for Retirement Reforms: Potential Consequences for Saving, Work, and Retirement Plans, the percentage of retirees who don’t have enough income to get by is projected to increase by 73% before the end of the century. Nearly 50% of retirees will have less than 75% of working-years earnings by 2090, up from about 26% in 2020.
Now is the time to face what retirement savings you have and if you don’t, it’s time to start a retirement account now. Decide what retirement age you’re aiming for and what social security funds you’ll have available. It’s worth engaging with a financial representative to assist you with your retirement goals as they can help guide your long-term goals with immediate action now by helping you come up with a concrete plan and determine asset allocation. They can help you understand your options including a traditional IRA, Roth IRA, retirement funds, contribution limits, retirement benefits, social security benefits, early retirement, what retirement income you’ll need and more.
4. Consider a catch-up contribution to bolster retirement funds
Again, a financial representative can help guide you with this but you may want to look into the option of a catch-up contribution. This is a type of retirement savings contribution that allows people age 50 or older to make additional contributions to 401(k) accounts and individual retirement accounts (IRAs). When a catch-up contribution is made, the total contribution will be larger than the standard contribution limit which helps bolster retirement savings if you’re lagging in your planning. This means that for many workplace retirement plans you can contribute an extra $6,000 a year in retirement contributions after age 50 which, if you have the funds, can make a significant difference in your future. Understanding your specific financial goals and financial situation as you plan for your future and retirement is key and being fully informed before you make any financial decisions is recommended.
5. Investigate health savings accounts (HSA)
You may not think of health savings accounts as having an impact on your financial planning and retirement but think again. A health savings account (HSA) is for those who have high deductible health plans only but those who do can benefit in significant ways. HSAs are known for their triple tax advantage: contributions are made pre-tax, growth is tax-free and withdrawals used for qualified health-care expenses are also are untaxed. Not to be confused with flexible spending accounts (FSAs) which have a set contribution, HSA contributions can be made anytime and are worth investigating to help save money!
6. Life insurance as financial security
According to the 2021 Insurance Barometer Study, conducted by Life Insurance Marketing and Research Association (LIMRA) and Life Happens, more than half (56%) of middle-income Americans have dependent children under age 18 and nearly half of these families (46%) say they would face financial hardship within six months should a wage earner die. If you have life insurance, it can provide the protection you may need and want for your family to go on after a tragic loss including funding education. Bankers agents can help you choose the right insurance for you so feel free to contact them for more information at (888) 991-4225.
7. Engage with a financial expert
No one can be an expert in everything and it can be challenging to undertake your financial and retirement future without expert guidance. Working with a Bankers Life financial representative can help give you confidence knowing that you’re choosing the right savings vehicles and making smart investment decisions. A Bankers Life financial representative can be by your side every step of the way helping you be confident in your strategy. Learn more about our services here.
This material provides general information about the described insurance product(s) for educational purposes only. This is not intended as investment advice or to recommend the insurance product(s).
Bankers Life Securities, Inc., Bankers Life Advisory Services, Inc. and their representatives do not provide legal or tax advice. Each individual should seek specific advice from their own tax or legal advisors.
Bankers Life is the marketing brand of affiliated companies of CNO Financial Group including, Bankers Life and Casualty Company, Bankers Conseco Life Insurance Company (BCLIC), Colonial Penn Life Insurance Company, Bankers Life Securities, Inc., and Bankers Life Advisory Services, Inc. Non-affiliated insurance products are offered through Bankers Life Securities General Agency, Inc. (dba BL General Insurance Agency, Inc., AK, AL, CA, NV, PA). BCLIC is authorized to sell insurance in New York.
Securities and variable annuity products and services are offered by Bankers Life Securities, Inc. Member FINRA/SIPC, (dba BL Securities, Inc., AL, GA, IA, IL, MI, NV, PA). Advisory products and services are offered by Bankers Life Advisory Services, Inc. SEC Registered Investment Adviser (dba BL Advisory Services, Inc., AL, GA, IA, MT, NV, PA). Home Office: 111 East Wacker Drive, Suite 1800, Chicago, IL 60601
