Am I Doing Enough for My Financial Future?

You may be a whiz at maxing out your IRA or a pro at meeting your company’s 401(k) match, yet you might still feel like it’s not enough. Being unsure about retirement can be natural. But sometimes, worries without a plan do more harm than good.

Financial consultants Rachel McLain and Addison Schubert discuss ideas that could help boost your savings, whether you’re concerned about choosing the right retirement tactics or wonder how much you should save.

One place to start is determining where you stand right now: on track, falling behind or ahead of the curve. Regardless of where you find yourself, our strategies can help you take steps to get where you want to be as you plan for your financial future—or feel confident you’re doing what you can.

Ideas to Help Secure Your Financial Future

There’s more than one way to plan for your future and not every idea may fit you. Consider the following to help you feel more confident you’re doing all you can for your future.

1. Max Out Traditional or Roth IRAs for Tax Benefits and Saving

Traditional and Roth IRAs have typically been an essential retirement strategy. They offer tax advantages on your contributions and can be a sensible way to put money away for retirement, even if you have an employer-sponsored retirement plan.

“Contributing the maximum to an IRA each year not only helps build your savings, but it can also maximize the tax advantages too, regardless of which type of IRA you choose,” says Addison. If you’re not ready to max out an IRA, you could consider increasing your contribution amount each year. “Any amount can make a difference.” Which IRA should you choose? Rachel says, “Choosing between a traditional versus a Roth IRA will depend on the individual, their tax situation and sometimes their age.”

Addison agrees, “If you’re in a higher tax bracket right now, you may want to consider a traditional IRA and take advantage of savings on your taxes today.” For those in lower tax brackets, a Roth IRA may be a consideration so you can have tax-free withdrawals in retirement. “I like my clients to have both, so they have more tax diversity when it comes time to withdraw their money in retirement.”

2. Match Company Contributions and Other Retirement Plan Strategies

Another option is to check into your employer’s retirement plan to see if it offers matching contributions. Those can be available in 401(k) plans or other types of retirement plans, such as SIMPLE IRAs for smaller businesses.

Your company may match contributions up to a certain percentage annually. If you can meet your company’s match amount, that is additional money going into your retirement account.

“Taking advantage of a company match can be a convenient way to help boost your retirement contributions without costing you more,” says Rachel.

While contributing to the match is a smart tactic, you can also contribute up to the maximum allowed. In 2024, the maximum for 401(k)s is $22,500 for those under age 50. You can contribute an additional $7,500 if you are age 50 and older. In a SIMPLE plan, you can contribute $16,000 in 2024 if you are under age 50 and an additional $3,000 if you are age 50 or older.

“All combined, I like my clients to contribute 15% of their income for retirement—which could be a combination of contributing to a retirement plan and their own IRAs,” says Addison.

If your company offers a Roth 401(k) contribution option, you can take advantage of the tax diversity mentioned earlier. Rachel says, “You can use Roth IRA vs. Traditional IRA calculator to determine which kind of contribution—pretax traditional or posttax Roth—is more beneficial to you. But ideally, you would contribute to both at different points.”

Another strategy for your employer’s retirement plan is to increase the percentage you save each year. “Some retirement plans offer automatic increases, but even if yours doesn’t, it can be a good idea to bump up your savings annually,” says Addison.

Rachel says, “I encourage my clients to contribute percentages from their paychecks instead of dollar amounts. That way, if you get a raise, you automatically increase the amount you contribute to your retirement plan.”

3. Knock Out High-Interest Debt to Free Up Money

High-interest debt includes credit cards and personal loans where the interest rate is much higher than an expected return you might get by investing in the market. For example, as of October 2, 2024, the average credit card interest rate was over 20%.* Investors' expectations regarding retirement account returns are generally lower than this.

“That means that if you have high-interest debt, you may lose money in the long term if you do not pay it off sooner,” says Addison. If you make regular retirement contributions but carry high-interest debt, consider paying it off as aggressively as you can.

“Investors may wonder if they should pay off debt or save for retirement first,” says Rachel. “We hope they can do both, especially if they have a retirement plan at work that does offer matching. At least contribute enough to get the match so that you don’t miss out on that extra benefit for your financial future.”

The key to is to determine whether it’s costing you more to pay on high-interest-rate debt than you are earning with your investments. If it is, you might consider making the debt your priority for now, and then focus more on your savings.

4. Consider an HSA for Medical Expenses, Tax Savings AND Retirement

Once you set up investment accounts and pay down debt, it may be time to consider a Health Savings Account (HSA), which offers benefits for health care costs now and in retirement, and it also can be used for other expenses in retirement—all tax-free.

An HSA is typically offered with a high-deductible health plan. While an HSA can help you cover today’s medical expenses through a pre-tax deduction from your paycheck, it can also be used as a long-term retirement vehicle. It may be a good choice, especially if you’ve maxed out your 401(k) and need additional savings.

Plus, when you reach age 65, you can withdraw funds penalty-free for any expenses. And like an IRA, it will be taxed as income.

“I’m not sure people fully utilize or understand how powerful an HSA can be,” says Addison. “And maxing out an HSA first may be a smart move because it can be the most flexible.”

“The contribution limit is not super high, so a lot of my clients are maxing out theirs,” says Rachel. “I think a lot more people would contribute to it if they understood the triple tax benefits HSAs offer.

“An HSA may be especially beneficial for people who retire early—earlier than their eligibility for Medicare—to help pay for their medical expenses in that in-between stage,” says Addison.

5. Consider Non-Retirement Accounts and Individual Securities

Is there a place for individual securities or different investment vehicles in your financial strategy? If you are making full use of tax-advantaged retirement accounts, it may be time to examine taxable accounts or even a brokerage account.

Rachel says a lot of her clients have brokerage accounts, and sometimes, it’s a hobby rather than a long-term plan. “I tell clients that the majority of their portfolio should be in a diversified vehicle like a mutual fund or an exchange-traded fund. Individual stocks can be good for extra investments, but they may not be the best foundation of your retirement savings.”

A rule of thumb is to have no more than 5% in one stock. “Individual stocks keep people involved and paying attention to their investments, which is a good thing. But it can also be risky, especially if you have too much invested in one thing,” she says.

Addison says, “It’s nice to have different pools of money. Pre-tax, post-tax and non-retirement investments can help you have more diversified tax options when it’s time to withdraw money in retirement.”

Rachel agrees, “I like the idea of my clients having tax diversification, especially if tax rates go up. So many people have their investments in a pre-tax bucket and that could mean they pay a lot in taxes when it’s time to withdraw in retirement.”

She says that’s especially true if the client is going to retire early. They can pull from investments like Roth IRAs (where taxes were paid before contributing) and taxable accounts and not feel that large tax sting before they are ready to draw Social Security or withdraw from their tax-deferred accounts like IRAs and 401(k)s.

Get a Financial Plan to Bring It All Together

While worrying about retirement savings may keep you up at night, remember to focus on what you can control. That can be creating a financial plan, making sure your portfolio is diversified and talking to a consultant when needed.

“A financial plan can bring all the pieces we’ve discussed together,” says Addison. “And help you determine when and how much of your portfolio to consider for each of our ideas listed.”

“It can also help with your financial decisions—Roth and traditional IRAs, HSAs and more,” says Rachel. “Another key is the tax planning aspect of what a plan can provide. When thinking about when you will retire, your plan can help give a clearer picture of what you might need.”

Developing a thoughtful plan may also help put emotions about volatility in perspective. Reacting to the market’s ups and downs may muddle your long-term strategy.

If you are unsure how to move forward, you can work with one of our financial advisors to help balance your portfolio with annual check-ins to review your strategy. And you may even sleep a bit better knowing you have a retirement plan that fits your needs.