Successful retirement planning for a secure and fulfilling future means doing more than just saving money. Taking a holistic approach to retirement management allows you to take advantage of strategies that help you make the most out of every dollar you save.
Here are five tips to help get started with a holistic retirement plan and maximize your savings:
- Start saving as early as possible. The earlier you start saving in a retirement account, the better — because a longer investment horizon allows you to take full advantage of compound interest, which can significantly grow your savings over time. Compound interest is the process where the interest you earn on your savings also earns interest, leading to exponential growth of your investment. By beginning to save and invest at a younger age, you give your money more time to grow, even if you start with smaller contributions. This long-term growth can lead to a larger retirement fund compared to starting later in life. Additionally, starting early may reduce the financial pressure in your later years, as you may not need to save as aggressively to reach your retirement goals.
- Contribute as much as you can. Contributing as much as possible to your retirement accounts is a good way to improve the likelihood that you’ll have enough money saved to retire when you want to. In addition, many retirement accounts offer tax benefits, such as tax-deferred growth or tax-free withdrawals, which can significantly enhance your overall savings. If you’re contributing to an employer-sponsored plan, your employer may provide matching contributions. If your employer does offer a match, try to at least contribute enough to take advantage of the matching funds. Through the Alight Worklife platform, employees have access to planning tools and calculators that help with estimating projected retirement savings.
- Make sure your investments fit your goals. A certified financial advisor can provide personalized advice on how to manage your retirement accounts, savings strategies and investment diversification options to help you build a diversified portfolio tailored to your risk tolerance and retirement goals.
- Factor in healthcare costs. Health issues can significantly impact retirement plans. Regular health checkups and assessments can help individuals prepare for potential medical expenses. Factoring healthcare costs into your retirement planning is essential to ensure you have sufficient funds to cover medical expenses as you age. Estimate your future healthcare needs based on your current health, family medical history and lifestyle. Consider possible costs — for example, health insurance premiums, out-of-pocket expenses and potential long-term care. A Health Savings Accounts (HSA) is a good fit for some people; these accounts offer tax advantages and can be used to pay for qualified medical expenses. By incorporating these costs into your retirement budget, you can better prepare for unexpected medical expenses and maintain your financial stability throughout retirement.
Retirement Benefits
Help your people feel good about what’s to come. We’ll show you how.
- Evaluate the big picture. There are many lifestyle differences between your working years and your retirement years. Comprehensive financial planning includes creating a detailed holistic retirement plan that considers income sources, expenses, inflation and potential healthcare costs, from the present through the end of retirement.
With financial educational tools and resources from Alight Solutions, you can build a holistic retirement plan to secure your financial future and support your overall wellbeing.
