There’s a situation happening in America in our golden years, and it’s something very few are prepared to handle. Generally speaking, people are living longer. This isn’t necessarily bad news — as long as you’re financially prepared to support yourself for 20 or 30 years instead of the 10 to 15 years previous generations needed to cover.
Don’t beat yourself up if you’re not there yet. It’s estimated that nearly half of citizens — 47 percent — have only $25,000 in retirement savings. That’s a rallying cry for everyone to beef up their savings, but women need to heed the call to action even more since we face challenges in retirement that men just don’t.
If we want any chance of packing up our desks and pulling out our Hawaiian shirts and passports in our mid-50s to early 60s, retirement savings deserves a spot on our monthly to-do-lists. Here’s a monthly guide to setting our future silver-haired selves up for success:
January: Start a movement
The start of the year is the ideal time to create goals for the months ahead. Whether it’s a specific dollar amount to save or simply vowing to educate ourselves on the types of retirement accounts we need to nurture, write it down and place it somewhere visible, says co-founder of Facet Wealth, Brent Weiss, CFP. “The key to success is to stay focused on only one thing. This can be starting to save in your 401(k), or an IRA, or health savings account, or maybe increasing what you are already saving by a small amount.,” Weiss says. “Small investments, over time start to pay bigger dividends.”
February: Schedule a date with yourself
Since this month is often associated with love, Weiss suggests not only paying attention to our relationships with other people, but also the one we have with ourselves. “It can sound a bit strange, but spending time thinking about our own financial health and wellness is an important part of achieving long-term financial success,” he explains. An effective way to do this is to book time on your calendar to go through your financial picture, line-by-line — and take notes. “Are there changes you want to make to improve it? Identify one and commit to becoming healthier,” he continues. “Don’t worry about changing everything, just get started.”
March: Think green with a financial plan
During the month where four-leaf clovers are everywhere is an ideal time to consider going green with our finances and investments. This can mean everything from going paperless with account statements to donating cash to charities with environmental causes you care about. And if you had a solid first quarter of the year, add a bit more green to your retirement accounts to accelerate your trip to the other side of the rainbow (retirement!).
April: Trick yourself into saving more
The first day of this month is a beloved holiday of children since — finally — they get to play a joke on their parents, sans consequence. There’s room for a little mischief for us adults, too. Weiss suggests tricking yourself into saving more by setting up automatic transfers into retirement savings with every paycheck. If you already do this, increase the figure — even slightly — to inch closer to your aspirations. “This automation makes it easier to save and you are keeping your savings plan from being top of mind. And once you stop thinking about it, it becomes a habit that you will continue for years to come,” he adds.
If you already contributed to an IRA for the 2019 tax year, good for you! Start funding your account for 2020. If not, you have until July 15 to fund an IRA. The IRA contribution limits for both 2019 and 2020 are $6,000 if you’re under age 50, and $7,000 if you’re 50 or older.
May: Chat with loved ones
Talking about aging with the people we love dearly isn’t easy. Even so, being prepared to care for our parents — or to understand their financial wishes once they pass — is part of the responsibility many adult children take on. While you probably shouldn’t have this conversation on Mother’s Day itself, use the holiday as a reminder to set a date to chat with both mom and dad. “Caring for parents is important to all of us, and planning for that care needs to start today,” Weiss says. “Every conversation and every planning step you can take now counts. It will help mom be better prepared for her retirement and ease the financial burden, should an issue arise.”
June: Make a plan for long-term care
Lounging by the pool or on the shore, relaxing and soaking up vitamin D … June is a magical, sunshine-y month. This is exactly how we imagine retirement, right? We all hope to be healthy well into our golden years, but just in case we aren’t, Northwestern Mutual Financial Advisor Ashley Russo suggests taking the time to research long-term care insurance, because eldercare isn’t cheap. “A person turning 65 today has a 70 percent chance of needing long term care,” she says, with the average cost of $7 to $10K per month per person in a nursing home. “Instead of paying up to $120k per year, you can place the financial burden on an insurance company for far less and protect all of your hard work rather than deplete it,” says Russo.
July: Time for a mid-year portfolio check-up
As temperatures rise to unbearable numbers in many parts of the country, so does our anxiety levels when we peek at the calendar. How is the year already half-way over?! Caleb Silver, financial expert and editor-in-chief of Investopedia, says July is the ideal reminder to do a mid-year portfolio check-up. By the end of July, you’ll have six months worth of investing data to sort through. Silver recommends asking questions like, “Are you comfortable with your risk levels? How are your midyear returns? Can you add more to your retirement accounts without hurting your savings or debt payments?” Once you analyze the information critically and find areas to improve (we’ve got a few suggestions), make adjustments so the rest of the year goes smoothly.
MORE: Behind on retirement savings? Here’s how to start catching up.
August: Look into paycheck insurance
As vacations wind down and warm weather starts to wane, getting back into the swing of work makes it a great time to think about our future paychecks. Keeping the income flowing if you’re temporarily unable to work is possible through disability insurance — aka paycheck insurance — which is typically offered by employers. “Just like we have insurance on our cell phones, we can have insurance on our paycheck,” Russo says. ”If you ‘break,’ and are unable to show up to work, your paycheck is replaced [usually up to 60% of what you earn].” Some cover the premium entirely or offer it as add-on coverage automatically withdrawn from each paycheck.
September: Create a career-advancement plan
With the leaves changing, we may start to feel the need to transform our own careers. “September is a great month to think about one thing you can do to advance your career,” Weiss says. “It could be as simple as asking for that promotion or raise that you have earned, or it could entail determining one skill you need to learn to move your career forward.” Career advancement adds extra zeros to your paycheck which, in turn, makes it easier to increase your retirement account contributions.
October: Slay those financial vampires
Shine a bright light on the hidden (or forgotten) costs lurking in your budget. These are the things that are sucking money away from your potential savings. We’re talking about things like Netflix, Spotify and other subscription services you’ve been paying all year long, but also things like banking, credit card and investment fees. Look into options to reduce or eliminate monthly fees and vow to slash at least one of them by Halloween.
November: Spread gratitude
November is a great month to express gratitude via monetary or physical donations. It’s not only beneficial to our hearts and souls, but to our bottom retirement lines, too. Charitable giving is a part of financial planning, so also take time to think about your long-term plan for making an impact with your donation dollars. “Keep in mind there are tax benefits, and you should be planning for those as well to maximize how far your money goes,” Weiss says. And don’t forget about the power of inner gratitude. Make a list of the things you’re thankful for. Studies show that taking time to count your blessings can increase your life satisfaction and happiness.
December: Review — and celebrate!
The year is coming to a close, and it’s time again to check up on your retirement savings progress. How did you do? Are you on track to max out your workplace retirement savings plan for 2020? If not, you have until Dec. 31 to give your future self the gift of financial comfort. (You can sock away $19,500, or $25,500 if you’re 50 or older.)
This month you can also squeeze in some important year-end tax “to dos.” And, finally, take a moment to celebrate your 2020 financial achievements and get pumped up to keep the momentum going through 2021.
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