As the year draws to a close, it’s natural to begin envisioning what the coming year will bring and planning how to make improvements in the areas that are meaningful to you. Resolutions are a time-honored tradition to usher in the new year, and while most people focus solely on what can be accomplished in those upcoming 12 months, we suggest taking an approach with a bit more foresight.
If you can determine resolutions for yourself and truly commit to them, you’ll be creating habits that benefit you for your entire life. In the article below, we will recommend three resolutions that not only will improve your life in the present but also set the foundation for a successful retirement in the future.
The Three Keys to a Dream Retirement
Before you can achieve the retirement of your dreams, you need to define what that retirement would look like. What would make you happiest? How will you spend your days? Regardless of how you answer those questions, making resolutions in the following three areas are essential to a successful and satisfying retirement:
- Financial security
If you can make small, achievable resolutions in each of these key areas, you will be well on your way to improving your life now and in the future. Get started by trying the three resolutions suggested below and add new ones each year to the three key areas to further build upon them.
Resolution #1: Imagine the Retirement of Your Dreams
Have you taken the time to truly clarify what you want in the next phase of life? Retirement should be a time to pursue your most cherished interests and hobbies – and to explore new ones, as well. If you were retired, how would you spend your days? Are you an avid reader or an exceptional chef? Do you enjoy being outdoors and going hiking, fishing or bird watching? Perhaps you might like to travel or go to the theater.
Run through all the possibilities available to you during retirement to understand what appeals most to you. Whether you realize it or not, you’re building a mental picture of what your retirement will look like, which is one of the biggest challenges retirees face. Rather than entering retirement being fearful of boredom or anxious about what will bring you happiness, you’ll already know what you want from this next phase of your life. You will have a plan to make the most of your time in retirement.
Put your resolution into practice:
- Leave yourself a visual reminder, like a sticky note, in a place where you will see it each morning. (The bathroom mirror, refrigerator, or front door are all good options.)
- When you see the note, pause for a moment and consider how you would spend that day if you were retired. All you need is a moment of two for this exercise. Ask yourself what you wish your day ahead looked like.
SEE ALSO: Common Financial Mistakes That Can Damage Your Retirement
Resolution #2: Be Active Every Day
Committing to a more active lifestyle now will pay health dividends later on in life. Even if you aren’t particularly active now, you can still work to develop this positive habit. A study by the British Journal of Medicine found that exercising as little as 11 minutes a day can contribute to longer life. By focusing on your wellness, you are more likely to live a long life, stay healthy, and remain active. All of that combines for a more satisfying and enjoyable retirement.
Put your resolution into practice:
- Find simple ways to add more movement to every single day. If you usually take the elevator in your building, opt for the stairs. If there is parking spot further away than you typically park, choose to park there to get the extra steps.
- Don’t obsess over how far you are going or how much progress you are making. Consistency will be the critical component in turning this resolution into a habit. It also helps to make sure your plan is within your abilities and schedule because you’ll have fewer reasons to avoid it.
If you are already active, think about finding something more challenging to keep yourself invested in this resolution. Try cycling, running, kickboxing, or any other activity that might pique your interest. It doesn’t matter how you move each day; it only matters that you do.
Resolution #3: Ramp Up Your Savings
Even if you’ve heard it before, it bears repeating: Start saving as early as you can. Not only will you be ahead of the game when your retirement years come around, but you will also have a longer time frame to benefit from the wealth building power of compound interest.
Compound interest, which is interest on the interest you earn in an account or investment, accelerates how quickly your savings can grow. For example, if you put $1,000 in a savings account with an annual interest rate of 1 percent, you would earn $10 in interest at the end of the year for a total account balance of $1,010. The next year, you would be earning 1 percent on the $1,010, for an account balance of $1,020.10, and so on.
How often your account’s interest compounds – whether it’s annually, monthly or daily – can also make a difference in your earning potential. Savings accounts, checking accounts, certificates of deposit (CDs), 401(k)s and other investment accounts offer common examples of compound interest.
Put your resolution into practice:
- When you want to increase your savings, the best approach is to set it and forget it! By automating your savings, you’ll be putting more money aside without even thinking about it.
- Another approach is to increase your savings in your 401(k), which is already automated. Upping your percentage by as little as 1 percent can make a significant difference over time.
Committing to your savings can be a challenge, but by doing it in small increments and automating it, you’ll be more likely to stick with it. A small increase in your savings won’t make a huge difference in your daily life. In fact, you may not even notice it, but those extra dollars will benefit from compounding interest. If you increase your 401(k) contribution, that amount will automatically increase with any pay raises you receive.
The goal of building your savings isn’t merely to have more money; it’s about what that money can bring you, which is financial freedom and the ability to live out your dreams. Once you reach your financial goals for retirement, you will have the confidence and control to move boldly into the next phase of life.
SEE ALSO: Five Wealth-Building Habits to Secure Your Financial Future
A Happier, Healthier, More Prosperous 2022
It’s never too early to start preparing for a successful retirement, and by focusing on your happiness, wellness, and financial security now, you will be able to enjoy the benefits immediately.
If you’re ready to get serious about planning for your future, our professional team at Resolute Wealth Advisor is ready to help you establish the financial security that is a critical component of a successful retirement. Please reach out to us today to begin the conversation.