New Years’ Resolutions for Your Retirement Plan Savings
Written by Dave Westra, Partner, CFP®, AIF®, CPFA; Jim LaMancusa QPA, QKA, AIF®; and Mandy Stalker, Institutional Service Team Specialist
January 3, 2020
Now is a great time to revisit your long-term retirement savings goals and the key components of your specific retirement plan. Here are five resolutions you may want to consider at the onset of the new year:
- Get in the Plan – If you are not currently contributing to the company’s retirement plan (e.g., 401(k) plan), you should consider enrolling now.
- Maximize the Company Match – Many companies offer a matching contribution. At a minimum, you should contribute up to the match amount to maximize the “free” money you can receive.
- Start Early to Maximize Retirement Savings – Many industry studies have shown that participants should save between 10% and 15% of their annual income throughout their career to be prepared for retirement. Certain retirement savings plans have some restrictions by age. If you are under 50 years old, you are able to contribute up to $19,500 in 2020. If you are over 50 years old, your annual limit is $26,000.
- Invest in a Diversified Asset Allocation – To achieve long-term retirement security, it is important to carefully consider the benefits of a well-balanced and diversified investment portfolio. Although diversification is not a guarantee against losses, it is an effective strategy to mitigate investment risk while achieving favorable returns. Many types of plans offer target date funds which are diversified, professionally managed portfolios that are customized to your retirement time horizon. By selecting the age-appropriate target date fund, you do not have to pick and choose different asset categories to stay well-diversified.
- Review Your Beneficiary Designation – Life happens, and because it does, it’s important to periodically review your beneficiary designation(s) to be sure it is reflective of your current intentions.
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