Planning for retirement can be tedious and time-consuming. It can also be tempting to put it off for another day. In fact, around 42% of workers say they don’t want to think about saving until they get closer to their retirement date, according to a report from the Transamerica Center for Retirement Studies.
Waiting too long to prepare for retirement can be risky, however. The fewer years you have to save, the harder it will be to reach your financial goals. Fortunately, there are a few effortless retirement moves you can make right now to keep your plans on track.
1. Review your estimated Social Security benefit amount online
Around 90% of retirees will receive Social Security benefits, and these monthly checks can make or break retirement for many seniors. As you’re saving for the future, it’s crucial to know how much you can expect to receive from Social Security.
The average beneficiary receives just over $1,500 per month, but some retirees may collect significantly more or less than that. To see your future benefit amount, check your statements online through your mySocialSecurity account. There you’ll find an estimate of your future benefits based on your real earnings.
Retirement planning will be easier once you know your estimated benefit amount. It will give you an idea of how much of your income will come from Social Security, as well as how much you’ll need to come from your savings.
2. Check your progress with a retirement calculator
Saving for retirement takes decades, and it’s wise to give yourself a checkup now and then. Use a retirement calculator to see how much you should be saving each month. If you find you should be saving substantially more, it’s better to find that out sooner rather than later.
Don’t be afraid to play around with your numbers, either. For example, try changing your retirement age and see how that affects the amount you need to save. Or adjust the amount you think you’ll spend each year in retirement.
If you’re behind on your goals and don’t have much cash to spare, you may need to adjust your expectations. Perhaps you’ll have to consider delaying retirement by a few years, for example, or find ways to spend less during your senior years. Calculating your goals only takes a few minutes but can help you create a stronger retirement strategy.
3. Check your asset allocation
Your asset allocation is how your investments are distributed between stocks and bonds. Younger investors should generally keep more money in stocks, while those closer to retirement should invest more conservatively in bonds.
No matter your age, it’s wise to have a balanced portfolio. Investing 100% in stocks can be risky. But putting all your money in bonds will reduce your investments’ earning potential, because bonds tend to see much lower returns than stocks.
A general rule of thumb is to subtract your age from 110. The result is the percentage of your portfolio that you should put toward stocks. For instance, if you’re 40 years old, you should aim to invest 70% of your portfolio in stocks and 30% in bonds.
This isn’t an exact science, and it’s also important to consider your tolerance for risk. But if you find you’re investing much too aggressively or conservatively for your age, you might consider making some adjustments.
Preparing for retirement isn’t easy and takes consistent effort over many years to save enough. But by making these simple moves now, you can give yourself a better chance of reaching your financial goals.