Does this sound familiar? You’ve been putting money into your 401(k) or 403(b) plan every paycheck, but you really don’t know if you’re saving enough, investing properly or if you can retire when you want with the income you’d like.
If that sounds like you, you’re not alone. BlackRock recently asked over 1,000 people who contribute to a workplace retirement savings plan if they are on track for retirement, and over one-quarter said they were “unsure.” Interestingly, women were 50% more likely to say they were unsure than men.
“Unsure” is not a bad place to be—if it means that you are going to take the steps needed to move from “unsure” to “confident.” The good news is, there are simple steps you can take to get that confidence and have a clearer picture of where you stand. Here are four tips to help you move from “unsure” to “on track.”
1. Do your homework
Confidence isn’t about how much you’ve saved. It comes from understanding how much income your savings will deliver when you need it. Just checking your account balance doesn’t tell you enough. At least once a year, you really need to do your retirement homework. Start by calculating how far your current savings will stretch as retirement income. There are several tools and methods to do so, including this BlackRock tool.
2. Sit at the front of the class
Make a commitment to stay engaged in your retirement planning. Spend a few minutes every quarter reviewing one of the major components of your retirement plan, such as maximizing contributions, reviewing your investment selections, tracking your balance, and so on. Get serious about tracking your progress.
3. Don’t forget extra credit!
When you were in school, you knew better than to pass up any chance for extra credit. There are two simple ones to help you get more from your plan. One is to be sure that you are contributing up to the maximum company match. That’s “free money” that no one should be leaving on the table. The second is to sign up for an automatic annual increase in your contribution rate, so you will lock in higher savings rates today as your earnings grow tomorrow.
4. Don’t be afraid to ask questions
More and more employers are investing in tools and resources to help you achieve financial success in retirement. So if you feel like you require more support beyond what you can learn on your own, reach out and ask for more.
Perhaps one of the biggest factors that makes participants “uncertain” is their investment choice. If you’re overwhelmed by the number of choices—not to mention the need to consistently review your options—make it easy on yourself and check if your plan offers a target date fund. Just choose the one with a date that comes closest to the date you plan to retire and you can be confident that you are in an age-appropriate investment portfolio.
Retirement confidence is within reach for everyone. And our research shows that the best way to boost your retirement confidence is to dig in and get started. By following the tips above, you can go from unsure to retirement-ready—while moving the needle on your savings balance in the process.