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New Year’s resolutions are the perfect time to evaluate where you are and where you want to go. Whether it’s eating healthier or getting serious about retirement planning, having a positive attitude and being open to change are the first steps to success. Here are 10 practical ways to turn challenges into opportunities so you can reach your retirement goals and enjoy life along the way.
1. Assess, don’t stress
Stressed out? Take a breather and do something you enjoy before crunching numbers. Studies have shown the effects of stress on decision-making can lead to negative outcomes, such as misjudging positive financial opportunities (financial gains) while increasing risky behavior when the impact is negative (financial losses).The solution to easing your stress reflexes? Schedule a planning session when you have time to think and talk through numbers and goals rather than assessing finances and retirement savings when reacting to a stressful situation. The best thing about financial and retirement planning is it’s never too late to start.
Take action: Block time on the calendar to sit down and evaluate your current financial and retirement plans. This can be a great opportunity to make a step in the right direction. Go for a walk or do something you enjoy before and after your session to counteract any negative effects of stress.
2. Set practical goals
Many of us dream about the magic workout or financial investment that will not only help us reach our goals but get us to the finish line faster. The reality is everyone has individual needs and a one-size-fits-all approach rarely succeeds. A better way to make your dreams come true is to identify practical goals. Setting a goal that you’re swearing off all carbs for a year might lead to disappointment, as could investing too aggressively or not saving enough.
The key to successful retirement planning is balance. This applies to having a balanced portfolio and a balanced approach to short and long-term goals. Examples of short-term goals could be evaluating your budget to see where you can cut costs and save money. Paying down debt is another practical step that can provide tangible results within a set timeframe. Long-term goals could include researching retirement savings options that can help you plan for 20 years or more of retirement expenses, including housing and costs of living.
Take action: Break it down. Write down short and long-term goals you’d like to achieve. Include two or three steps you’ll need to take to achieve each goal. Then tackle each task one at a time.
3. Take the time for financial decluttering
People can get feelings of accomplishment and clarity after decluttering their home because every item is sorted and put in its proper place. This decluttering tactic can also be applied to your finances. It can be hard to get your retirement goals on track when your finances aren’t straightforward enough for you to understand. When you take the time to streamline and get your financial strategy in order, the future steps you need to take to reach your goals can become clearer.
Take action: Simplification is key when it comes to financial decluttering. You can review your checking and savings accounts and figure out if there are ones that can be closed. This tactic is not to be confused with closing credit card accounts, which can sometimes affect your credit score. If you’re paying for a membership and subscription fee to something and hardly use it, this would also be a good time to figure out if it’s really worth your money. Another helpful tip is looking at the benefits of consolidating your investment accounts. While 401(k)s are held by your employer, if you leave your job for another one, talk to a financial professional about the best rollover options.
4. Have someone help you be accountable
Just like it’s easier to get yourself to the gym when you have a workout buddy, the same can hold true when taking the time to work on your long-term finances with a financial accountability partner. You don’t want to procrastinate on meeting your retirement goals. The start of the new year is a great time find someone who can keep you motivated and on track with a schedule by acting as your accountability partner.
Take action: There are many qualities you should look for when choosing a financial accountability partner. This person can be a family member, close friend or colleague. Most importantly, he or she should be someone you trust, have financial and time management skills and isn’t afraid to be honest with you about tough decisions that need to be made.
5. Look for creative ways to save
If you Google, “creative ways to save money” you’ll get 3 million results in about one second that include tips from not using ATMs that charge fees to waiting 30 days before buying that “must-have” item, plus countless more ideas. However, your lifestyle really dictates what you can or can’t live without. Do you have a gym membership you use all the time? Then axing it from your budget is probably not right for you. Taking care of your health is actually a great long-term investment. But, if you go to the gym a couple times a year, you might be better off reinvesting in quality walking shoes to save on membership fees (and maybe even gas) and investing the rest.
Take action: No one knows your habits better than you. Make a list of how you could save money this year and identify the strategies you are willing to try. If saving on taxes made your list, consider researching the tax-deferral benefits of an annuity and talk to your tax professional about what options are right for you.
6. Track your progress
Life is busy. Even if you’re making positive strides on your retirement resolutions for the new year, if you don’t track your progress, all of your efforts could get lost in the shuffle. When you set a goal, make a change, or see results, write it down. You can learn a lot from yourself in so many ways: identify patterns or pitfalls, revisit goals or give yourself gold stars.
Take action: Start to document your efforts. If you’re a fan of smartphone apps or digital tracking tools, look for apps like Mint or Personal Capital. If you prefer putting pen to paper, look for personal planners at any office supply store to record and monitor your progress.
7. Technology is your friend
Technology is your friend, even when it doesn’t seem like it, including when it takes three remotes just to turn on a Smart TV. Digital apps are there to help you with your daily needs, and this is true when it comes to saving for retirement. While working with a retirement professional in-person is always a great option, you can start researching educating yourself on your finances by just a click of a button on your cell phone.
Take action: There are many apps out there you can download to help you with your retirement finances. You want to make sure your money is secure in your retirement, and digital technology can help you get started.
8. Take time for the things around you
Sometimes, you just need to stop and smell the roses. Bills and deadlines come and go, but it’s also necessary to take a second to breathe and be present with the people around you. Your mental health is just as important as your physical and financial health.
Take action: You can start by taking a moment out of your schedule and making more time for friends and family. It can be something as simple as having family dinner together at the table, and not in front of the TV. You can also take up meditation, yoga and practicing mindfulness, which can help toward lessening burnout and creating a more positive outlook on life.
9. Celebrate small (or big) achievements along the way
Studies have shown that celebrating progress can help reinforce positive behavior in the brain by triggering motivation.Whether by simply recognizing efforts or indulging in your favorite food, reinforcing behavior can lead to a longer term commitment to a resolution. Longevity can be challenging, which is why only about eight percent of people actually achieve their new year’s resolutions.Stack the odds in your favor by measuring and celebrating your successes, no matter how small.
Take action: Think about what motivates you. Chocolate? Going to the movies? Talking a walk? Getting a high five from family or friends? Identify a few ways to reward success and then deliver when a goal is achieved.
10. Build momentum
Saving for retirement is a process and journey that doesn’t happen overnight. Build upon the strategies that work best for you and reevaluate ideas that hold you back. If the key to retirement planning is balance, then the secret to success is momentum. There’s no greater motivation that seeing results: “Don’t call it a dream, call it a plan.” — Author Unknown.
Take action: Keep going! By setting practical goals for retirement, you can get a clearer picture about how to reach your retirement dreams. Whether that’s finding a bucket list or planning for retirement income, sticking to your resolutions will help make those small savings add up and create peace of mind.
The content is provided for informational purposes only and does not constitute advice. For specific details on how this may apply to your personal situation, contact your personal financial advisor or insurance agent for more details. American Equity contracts are only sold through independent agents. Please contact your state insurance department to see if there is an independent insurance agent in your area appointed to sell American Equity annuity contracts.
American Equity Investment Life Insurance Company® does not offer legal, investment, or tax advice. Please consult a qualified professional.