Start the Year Strong
Planning for your financial future
By Jenna Abroo
One of the most common New Year’s resolutions is saving money. In today’s uncertain economy, making smart financial decisions is more important than ever. Building a solid savings cushion, maintaining a diversified investment portfolio, and following a consistent budget are proven ways to achieve financial stability.
Setting clear and realistic goals is essential to saving successfully, and one goal everyone should plan for is retirement. At some point, most people hope to step away from work and enjoy their later years with family. Depending on life circumstances, that day may arrive sooner than expected. Preparing for retirement is critical but knowing where to begin can feel overwhelming. Saving for something 10, 25, or even 40 years away can create a false sense of time. The good news is that a few simple strategies can help put your future on track faster than you might think.
When it comes to financial planning, time can be both our greatest ally and our greatest enemy. Saving years in advance can provide a financial cushion later in life, yet time is also something we can never regain once it has passed. Setting aside income for the future can feel intimidating, especially in today’s uncertain economy. What feels important at 18 or 25 often looks very different in our 60s and 70s.
Saving as early as possible allows your money to work for you through the power of compound interest. Compound interest occurs when earnings grow not only on your initial investment but also on the interest it has already generated. Even small, consistent contributions toward retirement can grow significantly over time, resulting in a larger total later in life.
Social Security is another key component of retirement planning. After paying into the system during their working years, many Americans rely on Social Security as a source of retirement income. According to the Social Security Administration, nearly nine out of 10 people ages 65 and older were receiving Social Security benefits as of Dec. 31, 2024.
While many people have paid into the system for much of their working lives, the benefit alone is often not enough to support a comfortable retirement. This raises an important question: How much is enough? According to a report from Trinity College, a common rule of thumb is that retirees need about 70% to 80% of their pre-retirement income to maintain a comfortable standard of living.
Because benefits vary widely, having supplemental income is essential. With company-funded pensions now largely a thing of the past, there are several ways individuals can plan for retirement. Financial planners can help build a diversified portfolio based on an individual’s risk tolerance, including options such as stocks, 401(k)s and Roth IRAs. Choosing investments with higher growth potential is one way to put your money to work for the future.
The second most important factor in achieving financial success is planning. Good intentions alone mean little without a clear strategy to support them. Your approach will depend on your financial goals and the stage of life you are in, but having a plan is essential.
If your employer offers a 401(k) match, be sure to contribute at least enough to receive the full match. For example, if your employer matches contributions up to 3%, you should contribute a minimum of 3% as well. Being proactive with retirement savings allows your earnings to grow over time through compounding.
Whenever possible, consider directing work bonuses or extra income into your 401(k). While annual contribution limits apply, making consistent contributions can significantly increase your retirement savings as the years go by.
The age at which you retire can significantly affect your benefit amount. Some people assume the best option is to stop working and claim Social Security as soon as they are eligible at age 62, but that is not always the case. According to Bank of America, “For every year you delay receiving a Social Security payment before you reach age 70, you can increase the amount you receive in the future.”
Claiming benefits too early can result in a permanent reduction in monthly payments. Each year you delay claiming benefits, up to age 70, increases your monthly amount, and those increases can add up quickly over time. Even postponing retirement by one year can make a meaningful difference.
Deciding when to claim benefits is largely a numbers-based decision that depends on your savings, income sources and long-term financial goals. While no one knows how long they will live after retirement, it is important to choose a plan that provides financial comfort and security.
Retirement planning is not a one-size-fits-all process, and the right approach will look different for everyone. What matters most is starting the conversation and taking intentional steps, no matter your age or income level. Whether it is increasing contributions, adjusting investment strategies or reassessing long-term goals, small changes today can lead to greater financial security tomorrow.
For those unsure where to begin, speaking with a qualified financial professional can provide clarity and direction. Scheduling a financial review, attending an educational workshop or using trusted planning tools can help turn intentions into action. The most important step is the next one — taking control of your financial future before time takes that choice away.