15 Decisions You'll Thank Yourself for in Retirement

Retirement can feel light-years away when you're heading to yet another day at the office, but the years slip by faster and faster all the time. That's why you need to start thinking about retirement right now, even if you don't plan to quit the workforce for a few decades.

Here are 15 tips that can help you get moving toward your goal. They may not all apply to you, but try a few to see what kind of a difference they can make. Trust me, you won't regret it.

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If you haven't already done so, now is the perfect time to figure out how much you need to save for retirement. Make note of how much you've already saved and think about how you plan to spend your retirement, including where you'll live and what you'll do with your free time. Estimate your average annual retirement costs and your life expectancy as well. A retirement calculator can help you put all of this together into an actual savings plan.

Don't forget to subtract money you expect from other sources, like Social Security or a 401(k) match, when estimating how much you'll need to save on your own.

How much you get from Social Security depends in part on when you sign up, so it's important to plan for this as well, even if you're too young to claim right now. You can start Social Security at any point after you turn 62, but you have to wait until your full retirement age (FRA) if you want the benefit you're entitled to based on your work history. That's somewhere between 66 and 67 for today's workers.

Every month you delay benefits increases your checks slightly until you turn 70. Delaying benefits is usually smarter if you expect to live into your 80s or beyond. But if you have a terminal illness, you're probably better off signing up right away.

ALSO READ: 3 Great Reasons to Take Social Security at 62

If you're married, make sure you include your spouse in your retirement plans. Talk about how each of you plans to spend your time and any trips you want to take together. You should also decide when each person plans to claim Social Security and how much each of you will set aside for retirement each month.

Sit down with each other at least once a year and review your retirement plan again to ensure you're still on the right track. If your plans change, be sure to update your retirement savings strategy.

Setting up automatic contributions to your retirement account can save you time and reduce the risk that you'll forget to make them. The exact procedure will vary depending on the retirement account you're using, but it's usually pretty simple.

Most 401(k)s enable you to place a dollar amount or percentage of each paycheck into your account each pay period. And many IRAs enable you to link a bank account and set up automatic transfers.

A 401(k) match is money your employer gives you for your retirement, but you only get it if you also put some money into your 401(k). Not all companies offer this, but if yours does, you should make every effort to claim yours every year. A 401(k) match is a limited-time offer, and if you don't claim it, you're essentially giving up a bonus.

Talk to your company's HR department if you're not sure how its matching system works. You may also want to inquire about its vesting schedule if you're new to the company or planning to leave it soon. The vesting schedule determines how long you have to work for the company before you're allowed to keep your employer-matched funds.

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It might not be feasible for everyone, but if you're able to, maxing out your retirement accounts every year can help your retirement savings grow quickly. But how much you must contribute to max out your account depends on the type of account you have and the year.

In 2022, you'll need to set aside $20,500 to max out your 401(k) and $6,000 to max out your IRA. But these limits can change over time, so it might be possible to set aside even more money in subsequent years.

ALSO READ: How Many Years of Maxing Out a 401(k) Does It Take to Become a Millionaire?

Adults 50 and older are eligible to make catch-up contributions. These are additional retirement contributions above and beyond the limits discussed in the previous slide. Again, they vary depending on the type of account you choose.

In 2022, 401(k)s allow for an extra $6,500 in catch-up contributions, bringing the maximum contribution for adults 50 and older to $27,000. Those saving in an IRA can also set aside an extra $1,000 this year, bringing their max contribution to $7,000.

Budgeting carefully during your working years can help you free up additional cash for retirement savings. Comb back through your bank and credit card statements for the past year and look for any subscriptions you're not using anymore. Cancel these as necessary.

You should also look for areas of overspending and brainstorm ways to cut back. For example, you could cook more and make your coffee at home rather than frequenting coffee shops and restaurants.

There are two main types of retirement accounts: tax-deferred and Roth. Contributions to tax-deferred accounts reduce your taxable income for this year, but then you pay taxes on your withdrawals later. Roth account contributions don't give you an up-front tax break, but you get tax-free withdrawals in retirement.

Typically, tax-deferred accounts are smart if you think you're in a higher tax bracket now than you'll be in once you retire. Otherwise, Roth accounts might be a better fit for you.

ALSO READ: The No. 1 Reason to Start Saving in a Roth IRA Right Now

If you don't have any other plans for them, set aside windfalls, like year-end bonuses and tax refunds in your retirement account. You could also do the same with holiday and birthday money that you get from family and friends.

You'll probably need an IRA if you plan to do this because 401(k)s don't allow for one-time contributions. So consider opening one today if you don't have one already.

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A health savings account (HSA) is technically designed to hold money for medical expenses, but it offers many of the same tax benefits as a retirement account. Your HSA contributions reduce your taxable income, and your medical withdrawals are tax free at any age. You can also make nonmedical withdrawals, though you'll owe taxes on these, plus a 20% early withdrawal penalty if you're under 65.

You may contribute up to $3,650 to an HSA in 2022 if you have an individual health insurance plan with a deductible of $1,400 or more. Or you can save up to $7,300 if you have a family plan with a deductible of $2,800 or more.

High-interest debt can eat up your savings quickly if you carry it into retirement. So it's best to avoid this whenever possible. Make note of all your debts, including the interest rates on each one, and then come up with a strategy for paying it off.

A balance transfer card works well for credit card debt as long as you feel confident you can pay back everything you owe within the 0% APR period. Or you could try a personal loan. These give you a predictable monthly payment, though the interest rates are a little higher than what you see with some other types of loans.

ALSO READ: Why You Should Pay Off Your Credit Cards as Soon as Possible in 2022

All investments carry fees, though many people don't realize it because the money automatically comes out of their retirement accounts. There's no way to avoid investment fees entirely, but you can take steps to reduce them.

Index funds are a great, low-cost option for most people. They give you instant ownership in hundreds of companies, and most only charge you a few cents to a few dollars per year, depending on the size of your portfolio.

It's usually best to leave your savings alone until retirement, because withdrawing money from retirement accounts while under 59 1/2 usually carries penalties. There are exceptions for things like large medical expenses or educational expenses or a first-home purchase. But, even then, you'll still be setting your retirement savings back.

Look for other ways to get the money you need. Consider taking out a loan or saving up for a while before you buy an expensive item. Make sure you also have an emergency fund, so you don't have to tap your retirement savings to cover unplanned expenses.

You still need a budget in retirement if you don't want to run out of money too soon. You may have heard of the 4% rule. This says you can withdraw 4% of your savings in the first year of your retirement. Then, you increase this amount a little in subsequent years to counter inflation. It's supposed to make your money last at least 30 years, but it doesn't always work out that way.

That's why some people prefer to use a 3% withdrawal rule instead. Or you can come up with your own plan. The important thing is to have a strategy that ensures your retirement savings will last you several decades at least.

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Saving for retirement is a lot of work, but the reward is a few decades in which you can spend your time however you please, so it's definitely worth the effort. The tips above can start you well on your way, but you have to stay consistent if you really want to get the most benefit from them. See if you can also brainstorm some more retirement savings strategies to help you reach your goal even faster.

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