Ah, April. Once again, our world is filled with cherry blossoms, the smell of grass, Easter egg hunts and daylight stretching into the evening.
Spring has sprung.
This is my favorite time of year. I’m blessed to spend most of my free time with my family at our cabin. For us, spring means getting the kayaks ready, replenishing our fishing equipment, and choosing the Patterson “song of the summer.” Yes, each year we select a song that gets us fired up for a summer filled with boating, floating, family, friends and fun. (Past “song of the summer” winners include “Beautiful Day,” by the Eels and “Cruise,” by Florida Georgia Line.)
This year’s “song of the summer?” “True to Myself,” by Ziggy Marley. Why “True to Myself?” Two reasons: It’s got a great beat and begs to be played (super-loud) from giant stereo speakers all summer long. Particularly on a small lake in Iowa. (Sorry neighbors.😊) And it has a very important message. A message that applies to a lot of things, including retirement planning. Yes, you read that right. Retirement planning. One of the lyrics is especially noteworthy when it comes to your finances:
“I can’t make you happy unless I am. I say. I say. I gotta be true to myself. Gotta be true to myself.”
In a nutshell, you need to be true to (and honest with) yourself before you can please anyone else. Even when it comes to your finances.
In a way, retirement planning reminds me of New Year’s resolutions. A lot of well-intentioned promises to do better, to make positive changes. But most of the time, those goals fall flat. However, the difference between retirement planning and New Year’s resolutions is the fact that New Year’s resolutions can be set every year. But for many, retirement happens just once. There aren’t any second chances.
Are you taking the steps needed in order to create the retirement of your dreams? Before you answer that, take a brief moment to dig deep and answer truthfully to these questions:
- In the past year, did you become eligible to participate in a 401(k) plan? And if so, did you sign up?
- Did you get a raise or a bonus? If so, did you sock some of it away in savings or increase your deferral rate on your retirement plan?
- Did you make the IRA contribution deadline on April 15?
- How about that promise to yourself that you would “go talk to someone” about retirement planning? Did you meet with a financial advisor recently?
- Did you sit down (for even an hour) to review your investments, play with a retirement calculator, or put together a budget for 2017?
- Did you have a child and buy some life insurance?
- Did you finally consider purchasing some disability insurance?
- Did one of your kids finally graduate and leave the payroll? If so, did you use that as an opportunity to increase your savings?
Chances are, one or more of these questions applied to you. And I’m willing to bet that you didn’t take action on the one(s) that did. I can just see the excuses starting to fill your head. “But I’ve been so busy!” And “I filed my tax return too late.” Sometimes, our more immediate priorities, like choosing your song of the summer, finishing a show on Netflix and planning your summer vacation, take up more valuable time than you realize. And they’re the truthful priorities that are keeping you from controlling your financial destiny.
But it’s not too late. You don’t need to wait until January 1, 2018, to start thinking about renewal, redemption and resolutions. There are things you can do right now to make your future self happy. Think of it as spring cleaning your financial house.
Here are five tips towards a goal for a happier you for the rest of 2017:
- Increase your 401(k) deferral. For many, a good rule of thumb is to save 10% of your income. How close are you to 10%? Could your raise or any additional income push up your deferral a little more? Does your employer offer auto-escalation to help you “lock-in” future increases over time?
- Review your life and disability insurance. If you depend on your employer for some or all of your insurance protection, do you truly understand your coverage terms? What happens to your coverage if you change jobs or retire? What if your health changes? Will that impact your ability to get coverage down the road?
- Scheduled planning. Take a day, or even a half-day, to take a hard look at your spending, savings, debts and insurance coverages. Write everything down. Update (or create) your spreadsheets. Play with some online calculators. Develop a plan. Set some goals. Preferably, complete this at a place outside your home, where you’ll have minimal interruptions.
- See that advisor you keep putting off. If you don’t have a trusted advisor, ask your friends, co-workers or family members. Chances are, many of them use someone they trust and love.
- Don’t miss your IRA deadline in 2017. If you’re eligible to contribute, don’t overlook the benefits that an IRA can provide. Get it done before it’s too late.
Hopefully I’ve given you something to think about. Take some time this summer to make your future self happy by taking care of yourself today. And take some time this summer to listen to Ziggy and heed his advice.
This post was previously posted to HuffPost on April 26, 2017.