10 WAYS TO GET YOUR RETIREMENT BACK ON TRACK



Retirement

Has the uncertain economy taken a toll on your retirement plan during the past five years? It’s not too late to get back on track—even if you’re in your 40s or 50s. If you’ve experienced a financial setback, here are some steps you can take to ensure that you’ll have enough money left in the autumn of life.

Improved borrower experience
The mortgage process is largely driven by documents, with loan files that often can surpass 500 pages. For applicants, this means filling out dozens of paper forms, unearthing documents and financial records, and then scanning or faxing them to the lender. As the process becomes increasingly digitized, however, required information such as bank account activity, credit details, tax forms and pay stubs can be prefilled easily into an online loan-application form. Because data is independently verified from the source, lenders can confirm quickly that the provided information is timely and accurate, speeding up the review process. Mobile offerings also are providing unparalleled access to borrowers—from initially completing the loan application to submitting, reviewing and e-signing documents.

Evaluate your cash flow
The first step to righting your retirement plan is examining your income—and where it’s headed. Financial advisers recommend putting away at least 30 percent of your gross income every month.

Cut out the luxuries
To achieve your retirement goals, you might need to reduce your cash outlay. Many people are surprised to see what they spend, whether it’s splurging on clothes or meals at expensive restaurants.

Use online tools to help save money
Sites such as Mint.com and YouNeedABudget.com can help you track and change your personal finances.

Take advantage of 401(k) match
Many employers offer to match employee contributions to retirement plans. Make sure to take them up on this, at least up to the maximum percentage they’ll match—it’s free money.

Evaluate your investment choices
Low-fee, no-load plans are generally good options. But if you have a mutual fund that has a 1.5 percent management fee and it’s an S&P stock fund, you’re paying for the privilege of investing in an index fund.

Diversify your holdings
To help insulate yourself from market swings, make sure you have a healthy mix of stocks—both domestic and international—as well as bonds, commodities and real estate.

Don’t try to time the market
People who are paid to do this rarely get it right. Keep saving money on a routine basis. If you keep a regular flow, you’re going to pick up some stocks when prices are low.

Establish an emergency fund
Set aside three to six months’ salary in cash in case of job loss or family sickness. Having a cushion is important. In a pinch, you don’t want to have to draw on your investments.

Don’t take unnecessary chances
It’s important to adopt a strategy that will grow assets, but conserving the principal is even more vital. It’s easier to make up for a lost opportunity than to retrieve a 30 percent to 40 percent loss.

Don’t panic
Allowing emotions to dictate your investment decisions can lead you to dig yourself into an even deeper hole.