Talk to a professional
The first step you should take if you’re feeling uncertain is to talk to a professional, like a certified financial planner (CFP).
A CFP can help you prioritize your financial goals, offer valuable insight regarding your investments and build you a personalized saving strategy for the future.
Some banks provide free financial planning services, so it’s worth looking into whether you qualify for a free consultation.
You also can use an online financial planning service like Facet Wealth if you want to avoid the hassle of meeting up with a CFP in person during the pandemic.
Facet’s online CFPs are held to the same rigorous fiduciary standards as in-person advisers, so whichever route you take you can feel confident they’ll have your best interests at heart.
Refinance your mortgage
If you’re a homeowner, you may be able to free up some extra money for your retirement savings by refinancing your home loan into one of today’s record-low mortgage rates.
Rates on 30-year fixed-rate mortgages have fallen south of 3% in 2020 and have hit new all-time lows more than 10 times this year, according to mortgage giant Freddie Mac.
Trading in your existing mortgage for a loan at a better rate could potentially save you hundreds of dollars a month. Investing that for retirement could make a huge difference.
You’re a solid candidate for a refi if you own at least 20% of your home, have a credit score of 720 or higher or could cut your current 30-year mortgage rate by 0.75% or more.
Just keep in mind that when you refinance you’ll be required to pay closing costs — typically between 2% and 5% of your total loan amount — so make sure that these administrative fees won’t outweigh the savings you’ll see from refinancing.
Stay on top of your credit score
Whether you’re looking to refinance or not, maintaining a solid credit score is an important part of your financial plan.
You might not think that your credit score matters once you’re retired, but it does.
And while you’re still working toward retirement, your score directly impacts the interest rates you receive on things like loans and credit cards. Lower rates mean more money available to set aside for the future.
It’s OK if you haven’t looked in on your credit score in a while (or ever); you can check it for free online using a service called Credit Sesame.
If your score is lower than average, Credit Sesame will give you personalized tips on how to bump it up.
It’s free advice, and it actually works — some Credit Sesame customers have seen their scores improve by more than 200 points.
Cut down your monthly bills
While you’re saving for retirement, every dollar that you can shave off your regular expenses is another dollar you can invest.
A good place to start is with your subscription services. A 2018 study by Waterstone Management Group found that 84% of consumers underestimate how much they spend on subscriptions.
You can use a free app called Truebill to easily find and cancel any subscriptions you’re no longer using.
Next, see if you can save money on essential monthly bills, like car insurance.
It’s worth taking a look every six months to see if you can find a better rate. You may be able to find the exact same coverage that you currently have at a much lower price, saving yourself $1,000 a year or more.
Instead of hunting for quotes yourself, try using SmartFinancial to compare rates from multiple insurance companies for free in just a few minutes.