6 Signs You May Need to Revisit Your Retirement Plan
So you say you’ve got a pretty good nest egg set up in a 401(k) or an IRA—maybe you’re even one of the lucky ones that has an old-fashioned pension. You’ve been diligent, and you know it.
All that doesn’t mean you can completely set it and forget it. Even if retirement is decades off, you may want to be proactive now.
It can be helpful to regularly assess your retirement plan to help make sure you’re still on track with the progress you’re making—but knowing that and acting on it can be two different things.
Other than following general rules of thumb, like rebalancing your portfolio once a year, are you unsure when or how often you should be revisiting your strategy?
Here are six common clues that may signal when you and your retirement savings need to get back on the same page.
1. You dread opening your statements
Are the statements from your brokerage firm piling up in the same place where you keep your junk mail?
This might not just be about laziness. Perhaps you’re willfully ignoring them because you’re afraid of what the numbers will say. This behavior tends to emerge during recessions or other times of general market instability, according to Michele Clark, CFP®, principal of Clark Hourly Financial Planning in Chesterfield, Missouri. “One husband told me that when the economy got bad, his wife started to put financial statements away in a drawer without looking at them.”
This type of attitude, though, doesn’t help your anxiety; in fact, it may only add to it. One way to help take your head out of the sand is to make it easier to know where you stand on a regular basis. One way to do this is by linking your financial accounts to your account at LearnVest.com, so you can check on your retirement in the same place that you would check your daily transactions.
While you shouldn’t be rash about changing your entire strategy purely because of volatility, if you find it’s hard for you to ride the market waves then you may need to consider rethinking your risk tolerance. Just remember that your retirement investments are for the long haul, so consider tuning out the market noise and sticking to a strategy that works for your timeline.
2. You feel your retirement mojo slipping away
When you first started saving for retirement, you may have experienced the excitement of seeing your balances grow, and you may have found yourself thinking of how you could save even more.
Now, though, it’s likely that day-to-day bills and more immediate money goals have taken up all your brain space, and you’re starting to lose your fervor. “Sometimes people decide they need to get serious about retirement and are very focused, but over time they lose interest,” says Kevin O’Reilly, CFP®, principal of Foothills Financial Planning in Phoenix. “And that means that they’re not going to be doing the things they need to.”