fbpx

published on March 15, 2022 - 10:50 AM
Written by

Are you on track to achieve your retirement savings goals? It’s important to establish a target savings amount and regularly make retirement plan contributions. It’s also vital to regularly check your progress so you know if you are on the right track. Should you determine that you are falling behind on your savings goals, it’s time to try to rectify the situation.

Any or all of the following solutions can help you overcome a retirement savings gap:

#1 – Boost your savings
The first option to make up for a retirement shortfall is to boost your savings. For example, if you set aside $200 more per month in your retirement accounts, that could add up to more than $63,000 in 15 years (assuming a 7% average annual return before fees and taxes). Find that money by reducing current living costs, particularly discretionary expenses. You may want to refinance your mortgage to reduce house payments or transfer balances on high interest credit cards to lower your monthly payouts. Be sure to take full advantage of an employer’s matching contribution to a workplace retirement plan if you have access to one.

#2 – Upgrade your investments
For most people, time is on their side when investing retirement assets. This provides flexibility to invest your money in a way that can generate a competitive return because you have time to overcome short-term market fluctuations. If your savings isn’t generating the return you expected, you may want to reassess your holdings and seek out a combination of investments that have the potential to earn a higher return within your tolerance for risk.

#3 – Move your retirement date
You can choose to take more time to meet your retirement savings goal. That might mean working longer than you initially expected and continuing to set money aside to close the savings gap. If you planned to retire in your 60s or earlier, you should have some room to maneuver. Assuming you are in good health, adding a year or two of work may be feasible.

#4 – Adjust your retirement expectations
If you are too close to retirement to make a significant dent in your retirement savings gap, you may need to adjust lifestyle expectations when you are done working. Take a closer look at your retirement income needs and determine where you can cut back on discretionary expenses in the years to come.

Look for help
Even if retirement is a long way off, you want to stay on top of your progress and make sure you are taking all of the steps you can to make your goals a reality. Talk to a financial advisor to help you assess where you stand and what you can do to avoid or erase a savings gap.


Nicolas Allen, CFP® is a Private Wealth Advisor with Ameriprise Financial Services, LLC. in Fresno, CA. He specializes in fee-based financial planning and asset management strategies and has been in practice for 13 years. To contact him, consider http://www.ameripriseadvisors.com/nicolas.j.allen, (559) 490-7030 option 2, or 7433 N. First Street, Suite 102 Fresno, CA 93720.


e-Newsletter Signup

Our Weekly Poll

Do you think Valley Children's Hospital will lose financial support due to CEO pay revelations?
118 votes

Central Valley Biz Blogs

. . .