When it comes to making New Year resolutions, don’t neglect your finances especially your retirement planning. Taking a look at your retirement investing each year helps to ensure that you’re on track for your retirement goals and that you’re accounting for changes in your life each year.
Resolve To Get Your Employer Match
At the beginning of the year, it’s a great time to check your 401(k) or 403(b) contributions and ensure that you’re contributing enough to reach any employer match, if your employer offers one. Check your company benefits to see what your company offers, and then check your contributions to make sure that you are contributing enough to reach the employer match amount. Ideally, you’d want to contribute the maximum amount possible, but at least contribute enough to reach the employer match so that you’re not leaving that money out in the cold.
Resolve To Work On Your Debt
Not all debt is “bad” debt, but there is some debt that is more difficult on your finances than others. Debt such as your mortgage or a college loan likely isn’t doing harm to your bottom line, as long as you’re keeping it manageable – but high interest debt like a credit card can add up quickly and become difficult to manage. If you feel like you’re swimming in debt, analyze what debts you owe and start with the highest interest rates, or consider a loan such as a home equity loan to consolidate the highest interest debt into a lower interest debt. Creating a debt plan to pay back the debt over a schedule can keep you on track to resolve your debt so that once it is paid off, you can put the money you were paying toward the debt toward your retirement instead.
Resolve To Use Your HSA
If you’ve got a high deductible health plan, you likely have an HSA or health savings account – and if you do, you have an excellent opportunity to use it to invest in your retirement. In 2024, you can put $8,300 into this account for your family (or $4,150 if you’re a single person) and all of that money is tax deductible. When you take that money out, if it is used on a qualified medical expense it is also tax exempt, which makes this a valuable investment account. Plus, if you’re over 55 you can make catch-up contributions of an additional $1,000 per year.
Resolve To Budget
Budgeting can be a drag, but being unaware of where your money is going month in and month out can be detrimental to your retirement savings. Even just a high-level idea of the in-flow and out-flow of your money can help you to have a better idea of your spending and saving, so that you can identify any issues and course correct if need be. This is important not only while you’re working, but for the years leading up to retirement so that you can determine the amount of money that you’ll need each month and year to survive on your retirement budget.
This upcoming year, take a few moments to plan for your financial future ahead – not only for this year but for your retirement years as well.
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Published December 28, 2023
By Andrew Rosen, Contributor at Forbes