It’s a new year, and that means it’s time to look ahead and make resolutions to change your life. If you’re nearing retirement, you might be thinking about resolutions that help you transition into your non-working years. It may be even more important to make these resolutions if you’ve experienced major life changes in 2016.
Here are a couple of life changes that could affect your retirement planning. If any of these sound familiar to you, it might be time to start making some changes and resolutions to help keep your savings goals on track.
Your marital status has changed.
Going through a divorce or separation late in life can have serious ramifications on your plans. Not only is it an emotional strain, but—more often than not—you will have to start funding your retirement plans on your own. This can be a problem if you find yourself with fewer financial resources as a result of the divorce.
If you got married, however, you could find yourself in a completely different situation. Unlike when you were single, you’ll probably have more financial resources available to you. But you may also be facing more expenses. If you’re expanding your family or buying a new home, or if you paid for a big wedding yourself, your debt level may have grown as well. All these changes can have a big impact on your retirement planning.
You changed jobs.
A new job can present lots of opportunities and challenges. For instance, you may have a bigger salary, but that can also come with a bigger lifestyle to fund. Your benefits more than likely will have changed, too.
What’s your 401(k) plan, and are you meeting the match? If you’re not meeting your company’s match, you could be leaving money on the table. What kind of disability insurance does your new employer provide, and is it sufficient to meet your needs? If the disability insurance doesn’t meet your needs, you could be putting you and your spouse’s ability to retire in jeopardy, and you may want to think about supplemental insurance.
The kids left the house.
After your children have left the house and graduated college, you may find yourself with more discretionary income. That means you’ll be faced with a big decision: How should you spend the money? It might be tempting to spend it on luxury items like a lavish vacation or a fun new toy. But it might be wiser to put these funds toward your retirement.
For example, you could consider making catch-up contributions to your retirement funds. People over the age of 50 are allowed to put more money toward their savings to help them with their retirement planning. You can make a catch-up contribution of an additional $6,000 to your 401(k) and an additional $1,000 to your IRA.1 This might be a good plan if you feel like you’ve fallen behind on your goals.
Searching for a retirement planning strategy to fit your goals? Let’s start a conversation. Give us a call at Bridgeriver Advisors and discuss your goals with a financial planning professional today.
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