Behind on retirement planning? Don't worry — you're not alone. According to New York Life's latest Wealth Watch survey, 78% of adults say their ability to save for retirement has been negatively impacted — with current inflation (47%), unexpected expenses (36%) and health issues (26%) being the top three reasons why.
But it's never too late to take control of your financial future. With the right strategies and determination, you can work toward securing a comfortable retirement. Below are five tips for individuals like you who are playing catch-up on their retirement planning.
1. Boost your savings efforts
Increase your contributions to retirement accounts, such as employer-sponsored plans or individual retirement accounts (IRAs). Take advantage of catch-up contributions if you're 50 or older. Additionally, resist the temptation to spend any windfall or bonus and instead allocate it to your retirement savings.
2. Streamline your expenses and manage debt
According to New York Life's most recent Wealth Watch survey, of the 42% of adults who currently have credit card debt, 35% said their debt has increased in the last year, by an average of $4,157, for an average total owed of $8,431.
If you have debt, prioritize repayment to alleviate financial burdens and enhance your overall financial position. You might also identify areas where you can reduce discretionary spending and cut back on unnecessary costs. Consider downsizing your living arrangements, refinancing high-interest debt, or negotiating lower rates for services. Contribute any freed-up funds towards your retirement savings.
3. Seek professional guidance
When playing catch-up with retirement planning, seeking the guidance of a trusted financial professional can be invaluable. Consult with a financial professional who can assess your current financial situation, help you set realistic goals, and develop a personalized roadmap with you. Professional guidance can provide clarity and confidence as you work towards catching up on retirement planning.
4. Prepare for health events
Protect yourself from potential costly health-related challenges that could derail your retirement plans. Consider exploring options like long-term care insurance or health savings accounts, which provide financial assistance in the face of long-term care needs or medical expenses. These solutions can help safeguard your assets and those of loved ones.
5. Consider what you want to leave behind
Even if you're behind on retirement savings, it's important to consider the legacy you will leave behind. Life insurance can play a valuable role in leaving a meaningful legacy and helping your loved ones cover expenses after you are gone, whether it's paying for housing expenses, covering outstanding debts, or providing a financial cushion. Review your life insurance coverage to make sure it aligns with your desires for a lasting impact.
“We are in a turbulent economic environment,” says Suzanne Schmitt, Head of Financial Wellness at New York Life. “As traditional retirement savings and income vehicles come under pressure or become unavailable, people are feeling anxious and many also feel unprepared.”
But remember, it's never too late to take control of your financial future. By implementing the above steps, you can make significant progress towards a secure and fulfilling retirement.
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