Retirement Resolutions for 2021

The New Year presents a time to jump-start your retirement savings. Making a few changes now could allow you to retire with less stress and a bigger nest egg.

Here are some retirement resolutions to make for 2021:

— Create a retirement plan.

— Qualify for a 401(k) match.

— Pay off debt.

— Decrease online spending.

— Diversify your portfolio.

— Pad a health savings account.

— Don’t spend before earning.

— Evaluate your budget.

— Track expenses.

— Make saving automatic.

— Aim to save 15%.

— Declutter and save.

— Hold a monthly meeting.

— Reevaluate your goals.

Create a Retirement Plan

If you haven’t thought about what you want to do in retirement, now is a great time to focus on the future. “The first thing you want to do is have a retirement plan,” says Brian Decker, a fiduciary advisor and founder of Decker Retirement Planning in Salt Lake City. If you’re not sure how much income you’ll need in retirement, you can talk to a financial advisor to evaluate your goals and set up a plan.

[Read: New 401(k) Contribution Limits for 2021.]

Qualify for a 401(k) Match

If you have a retirement plan through your employer, check if it offers a 401(k) match. Some companies agree to put an amount into your 401(k) plan that lines up with a certain percentage or amount of your contributions. “At a minimum, make sure you are taking full advantage of any company match,” says Brad Sanders, a financial advisor at Stonebridge Financial Group in the Harrisburg, Pennsylvania, area. “You can also begin planning ahead to maximize your retirement contributions.” You can contribute up to $19,500 to a 401(k) in 2021. If you’re 50 or older, you can put in an additional $6,500.

Pay Off Debt

If you went through financial difficulties last year, such as a job loss or health-related incident, you may be carrying credit card debt. Before increasing how much you save for retirement, you might decide to first pay off the card balance. Once the debt is paid off completely, you can set aside the amount you were paying toward the balance for savings in an IRA, 401(k) or other retirement account.

Decrease Online Spending

While the ease of shopping online can save plenty of time, it can also lead to hasty purchases. “Slow your spending down,” says Harry J. Abrahamsen, founder of Abrahamsen Financial Group in Manasquan, New Jersey. “Do not be impulsive.” Before clicking through to check out online, look at your budget and think about the purchase. You might decide to wait until the following month to get an item or realize you don’t need it after all.

Diversify Your Portfolio

No one knows what the market will do next year, let alone five or 25 years from now. Look at how the funds in your portfolio are allocated to see if you feel comfortable with the investments you’re making. “Having a diversified portfolio where your money is spread into different types of investments, like cash, safe money and risk, can help you ride out the extreme highs and lows of the market and stay the course,” Decker says.

Pad a Health Savings Account

If you are enrolled in a high-deductible health plan, a health savings account can be incorporated into your retirement plan. Individuals can contribute up to $3,600 to a HSA, and families can put in up to $7,200 in 2021. “These accounts offer tax-deductible contributions, tax-deferred growth and tax-free withdrawals for qualifying expenses,” Sanders says.

Don’t Spend Before Earning

Checking that you have funds in your account to cover your monthly expenses can help you avoid unnecessary debt. “Some debts are acceptable,” Abrahamsen says. These might include a mortgage, car loan or student loan. “It’s the impulsive, non-essential purchases that create financial landmines,” Abrahamsen says.

[Read: How to Open a Roth IRA.]

Evaluate Your Budget

The start of the year is a great opportunity to look through your current expenses and income and rethink your budget. Think about monthly bills, like cable, phone, utilities and groceries. Consider if there are any areas that could be reduced or cut out. For instance, if you have a gym membership but haven’t gone in the last six months, you might decide to cancel the membership. Trimming certain expenses can free up more funds to save for the future.

Track Expenses

Consider committing to watching where every dollar goes during 2021. “When people pay attention to their expenses, income and spending habits, they simply become better at finances,” says Mike Webb, vice president at Cammack Retirement Group in Newton, New Jersey. You can track spending on paper, in a spreadsheet or with an app.

Make Saving Automatic

Rather than having to think about saving every month, try setting up automatic contributions. You can create a direct deposit that will take funds from your checking account and put them into savings, saving you a few steps. Part of your paychecks can also be deposited in a 401(k) account before you ever get a chance to spend the money.

Aim to Save 15%

Take a look at the proportion of your income you are saving toward retirement, and consider upping the percentage this year. Aim to save a little bit more for retirement each year until you are saving at least 15% of your salary. “If you can save 15% today, then you have a better chance at living an equivalent lifestyle during retirement,” Abrahamsen says.

[Read: How Much Should You Contribute to a 401(k)?]

Declutter and Save

If you’re looking for a quick savings boost, go through your home and look for items you no longer use. You can sell clothing, appliances and other household goods that are in good condition online. Put the money you make from the sales into a retirement account or savings account.

Hold a Monthly Meeting

On your own or as a family, try sitting down once a month to discuss finances. In addition to meeting short-term needs, set aside some time to talk about long-term goals. Having regular conversations can help you stay disciplined about planning for your retirement years.

Reevaluate Your Goals

It may be worthwhile to look at your retirement goals once a year. If you plan to travel during retirement or purchase another home, you will need a plan to finance these purchases. Make a habit of reviewing your retirement dreams every January. You may find you no longer wish for a second home, or would prefer living close to family members rather than going on extended trips. The exercise can keep retirement fresh in your mind and your plans up to date with your changing life situation.

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