It’s a new year to put your retirement plans in order. Regardless of what your age is, there are steps you can take to boost your chances of having a successful retirement. Here are some suggestions to get you on the right path:

1. Reevaluate what you should save for retirement.

The Center for Retirement Research at Boston College offers guidance on how much workers should be saving for retirement. The researchers at the center suggest that saving 15% could work for someone with average wages if they start in their mid-thirties and retire at 65. Here’s the center’s advice for someone who doesn’t start saving until the age of 45:

• Retire at age 62: Save 44% of pay
• Retire at age 65: Save 27% of pay
• Retire at age 67: Save 20% of pay
• Retire at age 70: Save 10% of pay

2. Save just a little bit more.

If the savings recommendations above sound too painful, you’d be amazed at how your nest egg can grow over time if  you can boost your savings by just one percent. A handy savings calculator on The New York Times’ website can help you do the calculations. Here is one of our previous blog posts that shows you how powerful this move can be:  Try Saving One Percent More

3. Obtain an estimate of your Social Security benefits.

You should be getting yearly letters from the Social Security Administration that include a projection of your future monthly benefits. You can also estimate your benefits by using the retirement estimator on the Social Security Administration’s website.

4. Don’t be so quick to claim Social Security benefits.

Nearly three out of four Americans start their Social Security retirement benefits at age 62. What many people don’t realize is that there is a hidden penalty for some retirees who can’t resist early-bird Social Security benefits. Here’s a previous blog post that shares the dangers of starting Social Security checks too early:  A Hidden Social Security Penalty

5. Get rid of your mortgage.

Research has shown that not having a mortgage in retirement is a major factor contributing to retirement happiness. Not having a house payment can reduce stress and also puts less pressure on a retirement budget.

6. See how much your investments cost.

Is your retirement portfolio stuffed with mutual funds that are fee hogs? It’s no surprise if you don’t know because you do not get a yearly bill. The money to cover a mutual fund’s charges is deducted automatically. An easy way to check a fund’s expenses is to look at its online prospectus. You can also head to Morningstar’s website and look up individual funds. Once you’ve called up a fund’s profile, click on the expense hyperlink. I did this with the Vanguard 500 Index Fund, which is one of the most popular funds in the country. The annual expense ratio of this fund is .17%, which is very low, versus 1.14% for the average large-cap stock fund. Over time, this difference in expenses can seriously cut into a nest egg’s returns.

7. Don’t ditch stocks.

When Americans retire, they often believe that they can no longer risk investing in the stock market. Instead they hunker down in a financial bomb shelter that they’ve built with CDs, money markets, bonds and other safe investments. What skittish investors don’t realize, however, is that this preoccupation with safety can be the riskiest move they make. Research has repeatedly shown that ultraconservative portfolios run the risk of imploding over long periods of time. One landmark study examined what would happen if an investor withdrew 6% a year from an all-bond portfolio. Researchers concluded that the investor faced only a 27% chance of having anything left after 30 years.

Learn More…

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