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When you know your retirement savings aren’t where they need to be, it’s easy to feel so overwhelmed that you push saving and investing to the back burner. You can worry about retirement later, right?
Investing in your future now could make you a millionaire later. So let’s make 2017 your year to get your retirement on track! Here are five simple resolutions to get you started.
Resolution 1: Define Your Retirement Dream
The first resolution is a fun one: Do a little dreaming. If you’re married, that involves your spouse too. Share your hopes and dreams with each other, and work together to create a common vision for your future.
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- Will you continue to work part time?
- Do you want to travel? Spend more time with grandkids and family?
You’ll never make progress with a moving target. So once you’ve got a clear picture in mind, put a dollar sign to your dream! An investing professional can help you figure out what kind of nest egg you’ll need to accomplish your goals.
Resolution 2: Increase Your Savings
If you want a hefty nest egg in retirement, you should invest 15% of your household income toward retirement each month. Not there yet? That’s okay! The most important thing is you’re working to get there. Just don’t stay stuck at a subpar savings rate.
Here’s why: Let’s say you’re saving $230 a month on a yearly income of $55,000. That means you’re stashing around 5% of your income toward retirement. That’s a great place to start—but it won’t get you to your goal.
So this year, challenge yourself to reach 10% by investing an extra $230 every month. Next year, add another $230 to the pile to bump your percentage all the way up to 15%.
If that feels like a stretch, consider the difference it could make over 30 years of investing:
That difference is worth nearly $900,000! That’s a resolution worth making! It might take some effort to increase your savings right now, but your retirement account will thank you later.
Resolution 3: Maximize Your Investing Options
Ready to make the most of your retirement money? The best place to begin is by looking at your workplace retirement plan. Does your company offer a match? If so, don’t miss out on that opportunity for free money. Invest all the way up to the match!
From there, you can explore other investing options. We recommend a Roth IRA for a couple of reasons:
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- A Roth IRA gives you thousands of mutual funds to choose from so you can build a well-rounded portfolio from the best growth stock mutual funds out there.
- A Roth IRA offers tax-free growth and withdrawals. That means the money you save in a Roth IRA is yours—all yours—when you retire.
Currently, you and your spouse can each contribute up to $5,500 per year ($6,500 if you’re 50 or older) to a Roth IRA. If you max out your Roth IRA and still haven’t invested your full 15%, invest the remaining amount in your 401(k).
Resolution 4: Focus on the Long Term
This next resolution might surprise you: Keep your hands off your investments in the good months and the bad months. Why? Because compound interest needs time to grow your money. The longer you leave your money invested, the bigger your nest egg gets.
So prepare yourself for the ups and downs that come with investing and commit to leaving your money where it is. After all, the only way you get hurt on a roller coaster is if you jump off.
Resolution 5: Partner With a Pro
If you really want to get your retirement on track in 2017, one of the most important resolutions you can make is to partner with an investing pro.A good investing pro can help you:
- Identify a specific retirement goal and show you how to reach it
- Choose mutual funds with a solid history of strong returns
- Keep a long-term perspective, no matter how the market’s performing
Remember, you call the shots when it comes to your retirement. Look for a professional who’s willing to educate and empower you with the information you need to make smart decisions about your future.