An old year is gone, and a new one has arrived. That means you are 12 months closer to retirement than you were in January 2018.
Does that thought make you excited — or nervous? If you haven’t saved nearly enough, remember that there is always time to pad your nest egg. But if you hope to make progress toward your retirement savings goals, hard choices are ahead.
Following are some key ways to get your retirement plan back on track. Some require extreme changes, but the sooner you start, the easier your job will be.
1. Crack the paralysis
Paralysis is understandable: We’re living longer and being forced to assume more of the savings and investment burden, with little or no education on the subject or support.
“Nearly three-quarters of pre-retirees agree that they should be doing more to prepare for retirement, but 4 in 10 say they simply don’t know what to do,” says Prudential Investments’ 2016 Retirement Preparedness Study.
Take this to heart: You don’t need to know what you are doing to get started. Start saving, keep saving and learn as you go.
Learn more: “5 Simple Ways to Invest Your Retirement Savings”
2. Pick a number
Set a savings goal. It may change later, but pick a number now to get going.
To fund a nest egg, many investment professionals suggest that people consider saving 10 to 12 times the amount of their last full year of income.
By that logic, if you expect to earn $60,000 in your last full year of work, you should make your goal $600,000 to $720,000. So, get started now!
Learn more: “Ask Stacy: How Can I Know I’ll Have Enough to Retire?”
3. Emancipate adult kids
Sit down with grown children and tell them what you are facing.
It’s a tough conversation. But laying your financial cards on the table gives them information they may need to plan their lives. It also may let you get a sense of whether living with them or expecting any support from them in your old age is a possibility.
Also, if your retirement is in peril and you are helping your adult kids financially, you’ll have to stop. There are other good reasons for withdrawing your support besides your money woes: Supporting adult kids can undermine their self-sufficiency.
4. Think carefully about divorce
If you’re on the fence about ending your marriage, understand that getting divorced deeply wounds couples’ finances.
This is especially true for women because they earn less and often drop in and out of the workforce for family reasons, contributing less to Social Security and retirement funds. But divorce affects men’s finances, too.
Divorcing at an older age can make it especially hard to recover. Think realistically about the financial implications for yourself, your children and your retirement.
Learn more: “10 Hazards of Divorcing When You’re Older”