Is your retirement plan headed in the right direction? If you're feeling lost about how to save for the retirement you've always dreamed of, it's not too late to get back on course. In fact, here are five simple ways you can improve your retirement roadmap, potentially allowing you to reach your retirement goals sooner rather than later - no GPS required.
Revisit your investment portfolio
Whether you're working with a financial advisor or managing your retirement accounts on your own, it's a good idea to regularly review your investment strategy to make sure that it's meeting your retirement objectives. For example, have you decided that you want to retire early? If so, you may need to adjust your investments to ensure you're earning enough to make this a possibility.
Take advantage of maximum contributions
If your finances will allow it, contribute the maximum to your retirement plans every year. By doing so, you'll increase your long-term investment potential. In 2016, the maximum contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is $18,000. If you're age 50 or older, you can contribute an extra $6,000 for a maximum contribution of $24,0001. These limits remain the same going into 2017.
Meet your employer's match
Not taking advantage of your employer's matching retirement plan is like saying no to free money. Find out what the minimum contribution is for you to be eligible to receive a company match. If possible, contribute enough to receive the maximum match possible to give your retirement fund a big financial boost. If you're not sure how your plan works, speak with your company's benefits representative.
Take advantage of automatic retirement plan features
Many retirement plans offer automatic investment and portfolio rebalancing features that can help you stay on track without having to pick up the phone, make an appointment, or fill out a form. For example, many plans offer the option to increase the percentage of your contributions to your retirement plan by one percent every year. The fact is, we all lead very busy lives. By taking advantage of these and other automatic plan features, you can help ensure that your retirement planning doesn't get put off just because life is busy.
Know when to recalculate your retirement directions
There are many events in life that can have a big impact on your retirement planning strategy. Some of these circumstances include: the birth/adoption of a new child, a divorce, marriage or remarriage, death of a spouse, a job loss, parental long-term care, major illness or disability, a new home purchase, or revised financial objectives - just to name a few. If you've experienced any of these life events, have a discussion with your financial advisor about how you may need to adjust your investment strategy to meet your current and future financial goals.
The road to retirement isn't always easy. Fortunately, there are actions you can take today to greatly improve the direction of your retirement. And who knows, they may even make the journey more enjoyable!