If you’re feeling overwhelmed about retirement, you’re not alone. 31 percent of Americans say they feel stressed about preparing for retirement, according to a 2017 survey from the Employee Benefit Research Institute.
Life is a lot less stressful when you have an effective retirement plan in place — and coming up with one doesn’t have to be difficult or expensive. We’ve put together a seven-day boot camp to whip your retirement plan into shape.
Day 1: Write Down Your Retirement Goals
Before you can reach your retirement goals, you need to figure out what they are. Doing so will also help you track your progress, keeping you motivated to save.
Your first step is to lay out clear and specific goals for your retirement plan. Consider what age you’d like to retire by and how much you’re likely to need each year. Make sure to lay out different factors that will affect how much you’ll need in savings, such as the cost of living where you’d like to live in retirement and the kinds of activities you’d like to participate in.
Day 2: Take Stock of Existing Accounts
Have you already started saving for retirement? On day two, make a list of all your existing accounts, like IRAs and 401(k) plans. Collect your latest account statements or log in online to see exactly how much you have right now.
Day 3: Estimate How Much to Save
Once you’ve established your retirement goals and your current savings, you can estimate how much you need to save per year to reach your goals. Voya offers a free calculator that helps you create a ballpark figure of how much you should save per month to reach your retirement goals.
Day 4: Work Out Your Budget
Write down your monthly budget and see where every dollar goes. How much is left over for your retirement plan? If you’re short of your monthly savings goal, you should create a long-term plan to eventually free up money in your budget. When you pay off your car, for example, hold off on buying a new one in order to channel car payments toward retirement instead.
Day 5: Set Up Monthly Contributions
To reach your retirement goals, consider setting up automatic, monthly contributions from your paycheck into your retirement plan if you haven’t yet. Because there’s no temptation to spend the money, it’s easier to stay on track with automatic contributions.
Day 6: Go Over Your Portfolio
Now that your savings plan is in good shape, take a day to go over your portfolio. Do you have the right investments? When you’re young, it’s smart to have higher-growth assets like stocks and mutual funds. As you get older, it makes sense to shift over to safer investments like bonds.
If you need help finding the right balance, target date funds do some of the work for you, based on when you want to retire. For example, a fund designed for people planning to retire in 2045 will manage investments to reach that goal.
Day 7: Review With a Professional
You’ve done some great work and have a solid plan in place. To wrap things up, meet with a financial adviser to double check you’re doing everything right. Some advisers charge by the hour, so you can get the advice you need and then run your plan from there. Don’t forget to take advantage of the resources at your disposal, such as Voya and the LifeCare Work-Life Employee Assistance Program.
After completing this one-week boot camp, you’ll have a stronger, more effective retirement plan. Start today to get on track for a better retirement.