They call your retirement plan a “nest egg” because you incubate it like a mother bird. Take proper care and give your egg the attention it deserves, and you’ll have a vibrant, flourishing retirement. Ignore it, and you could be scrambling to make ends meet in the future.
Here are some ways to make sure your egg hatches on time. With any financial decisions, we also recommend speaking to a financial advisor.
1. Get Your Employer’s Contribution
Companies often pay into employee retirement accounts, matching contributions up to a certain amount. Unfortunately, that benefit is left on the table if you don’t put money into your account. Talk to HR and find out how much you need to contribute to get the full employer match.
2. Max Out Your Health Savings Account
An HSA can be used as a backdoor retirement account if you’ve already maxed out your IRA and 401k. In general, those holding more than $2,000 in an HSA can invest that money in an ETF or mutual fund.
3. Examine Your Asset Allocation
The asset allocation of your retirement account refers to what you’re investing in – such as stocks, bonds, and commodities. This should change from aggressive to conservative as you get closer to retirement. Check to see if your allocation is skewed too far in the wrong direction.
4. Revise Your Budget
Not saving enough for retirement? It could be that you’re spending too much in the present. Look at your budget and cut back where you can. Depending on your shortfall, you might want to make changes to your lifestyle. This could include making such small changes as using coupons or getting rid of daily coffee runs or making bigger changes like missing a vacation this year or downsizing to a smaller home.
5. Cultivate a Hobby
Many workers retire so they can avoid the stress of their 9-to-5. However, lounging around the house all day won’t keep many people happy. Start cultivating hobbies now, so you don’t end up restless in retirement.
6. Decrease Your Investment Fees
One of the biggest factors in the return of your investments is how much you pay in fees. Go over each account’s fee schedule and switch to a cheaper alternative if you’re paying more than 1%.
7. Refinance Debt
Consumers with good credit scores should consider refinancing their debt – especially if they have high-interest debt like credit cards. Switching to a lower interest rate could speed up debt repayment and save you thousands. See tip #10 for one great way to refinance or consolidate debt.
8. Cut Your Kids Off
A 2017 survey found that almost 75% of parents give their adult children money. If you’re in this group, tell your kids you need to focus on your own retirement. Kids still living at home? Start charging a modest rent to encourage them to leave the nest – and give you a little extra income each month. They’ll be better off in the long run, and you’ll be able to get serious about saving.
9. Do the Math on Social Security
Deciding when to take your social security benefits can change how soon you can retire. But taking them too early can cost you thousands in lost benefits. A financial planner can help you figure out the best age to take your benefits.
10. Get a Reverse Mortgage
A reverse mortgage can provide extra money to live off, allowing you to wait to draw from your social security. It will first pay off your existing mortgage and no monthly payments are required on the reverse. This can increase your monthly cashflow savings. Just remember, you are still responsible for paying your property taxes, homeowners insurance, and home maintenance costs. You can use your proceeds for anything, which can help you live the retirement you want, starting when you want.
Zina Kumok is a freelance writer and owner of www.consciouscoins.com.