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Your Retirement Savings Performance Review

Oct 10, 2019 4 min read Kara Perez

Key takeaways

  • Retirement is a concern for everyone in the U.S.
  • Crafting a plan can make a difference in your stress and success.
  • Check your finances regularly to ensure you're sticking to your goals.


Retirement is the time to step away from workplace stress, enjoy life and pursue your interests. But how do you ensure that your plan will get you there? Retirement saving starts decades before you need the money. That's why it's critical to have an effective retirement plan in place now, and to regularly review it.

Americans aren't great at saving for retirement. People between 40 to 45 years old in the U.S. have a median retirement account balance of $14,500.1 About 66% of people age 21 to 32 have nothing saved for retirement, according to the National Institute on Retirement Security.2

You don't have to fall into those categories. Let's explore how you can craft a plan and review it regularly to achieve a retirement you'll love.



Envision your retirement

It can be hard to imagine your life two years from now, let alone plan for life that's 20 or 30 years away. Don't worry about getting all the details right, or trying to predict where the world will be in the future. Start with a broad outline of what you'd like your retirement to look like and go from there.
Some questions to ask yourself:

  • Where will I live? Do I plan on staying where I am or moving?
  • Will my monthly budget go up or down compared to today? (For parents currently supporting kids, it'll most likely go down.)
  • Do I foresee being on medication, and how much will that cost? (Look to your parents for a rough blueprint, and assess your current health.)
  • How many times a year will I travel, and what kind of trips (international flights versus local road trips) will they be?

Answering these questions will give you a solid starting point for how much your retired lifestyle will cost you. With ballpark numbers on housing, food, travel, and health, you can estimate a total amount that you need to save.

Create an action plan

Now that we've got something to work toward, it's time to figure out how to make it all happen.

The first step is to enroll in — and contribute to — an employer-sponsored retirement plan. If you work at a school or a nonprofit, that's probably a 403(b) plan, and if you're employed by a corporation, that's probably a 401(k) or an IRA.

Take advantage of any workplace plan, especially if they offer to match your contributions. That's free money for your retirement! About 94% of millennials who are offered a workplace retirement plan contribute to it, which is the same rate as older generations. Having a defined plan in place makes it easier to save.

If you don't have an employer-sponsored plan, you still have plenty of options. You can and should open an IRA for yourself. An IRA is an Individual Retirement Plan, designed for anyone to start saving for retirement. Freelancers and small business owners can also open up plans like a SEP IRA or Solo 401(k) to increase their retirement savings.

Those who have a workplace retirement plan can also open up an IRA. This is a good idea, as it allows you to save even more for your retirement each year.

Once you have your 401(k) and IRA set up, there's another account to consider — the HSA, or Health Savings Account, which has become popular as a supplemental retirement account. HSAs are available for individuals enrolled in a high deductible health plan.

Money saved in an HSA can only be spent on health costs, but that's perfect for a retiree. Many people have higher healthcare bills later in life, and having an account specifically for health-related costs can help your budget. Money that you put in an HSA while you're working grows tax-free, and withdrawals are tax-free as long as you use them for health expenses.

HSA accounts have a $3,600 maximum contribution limit for individuals and a $7,200 limit for a family for 2021. Those older than 55 can save an additional $1,000 a year. Perform a routine plan review. Consult your tax and legal advisors regarding your particular circumstances.

Life has many milestones and bumps, and there may be years that you contribute less to retirement accounts because you buy a house or have a child. However, make sure that you contribute something each year so that you don't miss out on compound interest. A little goes a long way when it has 30 years to grow.

Make a date with yourself to check in on your retirement plan at least once a year. Here are the things you should check on to make sure your money is growing at an appropriate rate.

  • How much are you paying in fees each year? If fees are high, consider switching around your investments.
  • What is your interest rate? Do some research to see if this is above or below average.
  • Where are all your accounts? If you left a job, you may have to transfer your employer retirement plan. Make sure to keep your accounts organized so you know where all your money is.

Saving for retirement takes years, and that's okay. By funding your accounts, contributing regularly, and reviewing your plan each year to stay on track, you can set yourself up for a secure and satisfying retirement.



What you can do next

Create a vision of how you'd like to live during retirement. What will inspire you to set aside money every month moving forward?


Kara Perez is a freelance writer who focuses on personal finance, and founder of financial literacy platform Bravely. She loves hiking and travels as often as she can.


  • 1 http://www.economicpolicyresearch.org/resource-library/research/inadequate-retirement-savings-for-workers-nearing-retirement
  • 2 https://www.nirsonline.org/2018/02/new-research-finds-95-percent-of-millennials-not-saving-adequately-for-retirement/


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