There was a point in my financial life where I crossed a certain milestone without fully realizing it. For many years, I worked toward my financial goals, saving 20% for my future dreams, and making sure I minimized my debt. Then one day, I ran my financial projections for retirement and learned that I was actually ahead of the game. If I continued on this path, I would be just fine. Now a lot can change – that’s just a part of life, but it got me thinking. What’s next? Should I be thinking differently now that I have achieved a baseline of success on my path to retirement?

At this point, I am no longer looking to survive retirement. I am looking to thrive in retirement.

If you find yourself in this position, the first thing you should do is celebrate! According to a recent survey by Bankrate, 55% of Americans feel they are behind when it comes to saving for retirement. How much should you have saved? Fidelity recommends by age 50 you should have six times your annual salary saved, and 10 times saved by the age of 67. If you have crossed this threshold, it is time to focus on thriving.

At this level, there are additional resources and tools you can use to expand your investment and protection options. Let’s walk through a few of these options, but know there are more to explore and I always recommend discussing it with a trusted advisor.

Dream Again

When you put your financial plan together, you might have started conservatively. Maybe your goal was to maintain 80% of your current spending. But at this point, you have that covered, so how would you like to expand your goals? Is the time right to add a second home or plan an annual trip overseas during retirement? Maybe you have always dreamed of being part of a country club in a warmer climate. Add that to your plan. You have the opportunity to be creative with your goals because you have done the hard part of saving for your future and being responsible with your cash flow.

It might also be time to bring other people into your plan. For parents, it is often a goal to support their children through higher education. Or, you might dream of leaving a financial legacy so all your descendants have the opportunity to continue their education. Maybe you believe it is important to be charitable and you want to nurture this value within your family. You could fund a charitable foundation and have family members choose the charities that are important to them.

It is time to revisit your values and start aligning your financial goals to the people or causes you find important.

Save More and Differently

To fund these new goals and dreams, you might calculate that you need to start saving a little more. But what if you are already maxing out your 401(k) and your IRA? What more can you do? Here are a few ideas to investigate:

Taxable Investment Accounts – When it comes to saving for retirement, most educational classes focus on employer-sponsored plans like a 401(k) or SIMPLE plan, or an individual retirement plan like a traditional IRA or Roth IRA. However, you could also use a taxable investment account to save toward your goals. It does not have the tax deferral or tax-free growth like 401(k)s or IRAs, but it does have its own benefits. First, you have more flexibility. There is no requirement to hold funds in there for a certain time period, nor is there an age restriction on when you can access the funds. Also, you can implement certain tax strategies like tax-loss harvesting in down markets. Or, use these funds to pay the tax on future Roth conversions.

After-Tax Contributions – Some employer-sponsored plans provide the opportunity to contribute after-tax dollars to the plan. You will need to check with the provider to see if this is an option for you. If it is, you are allowed to contribute up to the total annual limit after your 401(k) and employer contributions, like a match. For 2023, if you are 50 or older, this total amount is $73,500. These after-tax contributions can be taken out at any time, but because earnings are pre-tax, there might be taxes assessed on the withdrawal. Or, you could eventually roll these contributions to a Roth IRA.

Protect Loved Ones

Insurance – Life insurance plays a big part in the financial security of an overall plan. It helps mitigate the risk of a loved one dying unexpectedly. But at some point, we no longer have the same responsibilities. The house might be paid off, kids have gone through college and the retirement accounts have a healthy balance, so why do you need life insurance? The risks you want to mitigate have changed. Now you might want to protect a spouse from becoming your caregiver later in life, or you might want to protect your children from a substantial tax bill when they receive their inheritance. It is important to re-evaluate your needs and determine if long-term care insurance or “second-to-die” insurance might be a better option for you at this stage of your life. Lives change and your insurance should change with it. It should be reviewed as your life changes or every five years just to make sure it continues to protect what is important to you and won’t lapse when you need it most.

Estate Plans – Do you really need an estate plan? The answer is most likely yes, but speak with an attorney to determine what is best for you and your legacy. Most of the time, a good estate plan has nothing to do with you but everything to do with those you leave behind. It is your voice and your wishes put down on paper to reduce the amount of arguing or guessing your loved ones will do once you are gone. It is your opportunity to make your passing just a little bit easier on those you love. It provides instructions and a playbook for your beneficiaries and their trusted advisors. It can make the process and distribution of assets quicker. These documents can help all family members get on the same page now before the unthinkable happens.

Enjoy Life Now!

Why wait? So often in our plans we put everything way out into the future. Your retirement plan should also include things you want to do now or as you are heading into retirement. Life happens and we can’t predict how, so look at what is important to you and focus your resources toward that. For example, during the pandemic we saved some money because we weren’t traveling anywhere. Instead of allocating it to some of my long-term goals, I focused on the here and now. We decided to take the family and the grandmothers to an all-inclusive resort in Mexico and really treated them to a fun experience. It was a special time that the kids will always remember and it didn’t impact our retirement plans at all. So make a plan, stay consistent, and live a little.

A good financial plan is not created once and then put on a shelf. It will ebb and flow just like your life. Make sure you review your financial situation on a timely basis but continue to stay consistent and keep dreaming. I can’t wait to see what you come up with next.

This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant.


Fidelity: How Much Do I Need to Retire?
Fidelity: What to do with after-tax 401(k) contributions

Author Anne M. Mank Director of Financial Planning

Anne co-hosted the weekly radio show, Money Sense, and is a Certified Integrative Holistic Coach.

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