8 tips for hitting your retirement goals

A long-term financial goal for many people is saving enough to retire confidently. However, thinking long-term can be challenging when you’re focused on other, more immediate goals, like starting a family, paying for education, or even making rent. The good news is that the power of compounding interest is on your side if you start as soon as you can—even if you start small—and stay consistent.

Whether you’re already saving for retirement or not sure where to start, these tips can help you figure out and get closer to your retirement savings goals.

1. Set goals with a growth mindset.

When setting a retirement savings goal, avoid the mindset that things are too big or out of reach. Envision the retirement you dream of—and be specific about what you see.

While picturing your retirement, ask yourself questions like:

• How old are you?
• Where are you living?
• What are your hobbies?
• Do you have any debt?
• Are you traveling a lot?

Write it down or create a vision board and look at it often. Visualizing your retirement goals can help you stay on track toward reaching them.

2. Determine how much you need to save.

The 80% rule is a common retirement planning guideline used by financial experts. It suggests that you'll need 80% of your current annual income to maintain your lifestyle in retirement—but in reality, you could need much more or less than this based on your specific goals. Still, it can be a good way to start thinking about a number for how much you want to have saved when you retire.

To start working toward the 80% rule, it’s recommended to invest at least 10% of your income for retirement in a tax-advantaged account like a 401(k) or an individual retirement account (IRA). However, factors like your goals, age, and how much you already have saved can impact how much you choose to invest.

“If you want to retire early, you may really want to shoot for saving 20 to 30% of your income,” says Brian Ford, Truist’s head of financial wellness.

A retirement savings calculator can be helpful here. Ford says to ask yourself: “If I continue at this current pace of saving and investing, does it look like I’m going to be somewhere within that universe of my retirement goal?”

Automate your contributions: Also known as “paying yourself first,” this can help you save consistently and stay on track without having to think about it.

Factor in inflation and medical costs: We can’t control inflation, but we can consider it when it comes to our retirement savings goals. Although nobody can predict the future, a general rule of thumb is to factor in a 2% to 3% increase in the cost of living expenses each year due to inflation.

It’s also normal for our medical expenses to rise as we age, which is why many retirees emphasize the importance of taking care of your health when you’re younger. A Health Savings Account (HSA) can be a great way to save for medical expenses both now and in the future.

3. Use tax-advantaged accounts to save and invest.

Accounts like employer-sponsored 401(k)s and individual retirement accounts (IRAs) were created specifically for saving for retirement and long-term financial growth.

Tap into your employer’s retirement plan if they offer a 401(k), and take advantage of any employer match programs. For example, if you can’t save 10% of your income for retirement right now, but your employer offers a 3% match on your 401(k) contributions, then you should at least try to contribute 3% of your income so you’re getting the most you can out of the match.

If a 401(k) isn’t an option, consider setting up an IRA. Even if you do have a 401(k), making additional contributions to an IRA can be a good way to supercharge your savings–or catch up if you’re behind your targets.

Read more: Roth vs. traditional retirement accounts: Which is best for you?

HSAs can also be a great savings tool for post-retirement. They come with similar tax advantages as retirement accounts—and once you hit retirement age, you can use the funds in your HSA for any type of expense, not just healthcare.

4. Diversify your investments.

Since retirement savings accounts are often tied to the stock market, diversifying your investments is important. It can be helpful to have your 401(k) and IRA invested across multiple industries and asset types using mutual funds and exchange-traded funds (ETFs).

“Diversification simply means to allocate your investment dollars into vehicles that work differently, like an appropriate mix of stocks and bonds based on your age, goals, and risk tolerance,” says Ford. This may help provide a more balanced approach to long-term growth as the market ebbs and flows.

5. Try not to withdraw from your retirement savings early.

Establishing a proper emergency fund and saving for other long-term goals can help you avoid touching your retirement savings early.

Early withdrawals from retirement accounts may come with penalties and additional taxes that can take you off-track from your long-term goals. Similarly, avoid taking loans against your accounts. Borrowing against your retirement can also slow down your savings progress.

6. Regularly track your retirement savings.

Just like tracking your steps each day can encourage healthy behaviors, tracking your retirement balance can encourage more saving.

According to a recent survey, people who check their retirement accounts daily or weekly tend to save more of their income compared to people who never check their retirement accounts^{Disclosure 1} .

You don’t need to check your balance every day, but regularly checking your account—whether it’s monthly or quarterly—and seeing your nest egg grow may help you stay motivated. If you never check your balance, it can be easier to overlook the importance of saving and investing.

Take the time to regularly check in on your balance, along with your annual contributions, especially if you opted to have it automatically increase each year. Utilize tools in your account to estimate your target retirement savings goal, and estimate your retirement age and projected monthly income.

7. Talk about retirement with people close to you.

People often think about financial goals as a private topic, but when you talk openly about your retirement goals, you can learn a lot from the people closest to you. If you have a significant other, bringing up the topic of retirement is a good way to start imagining what it could be like. Getting an idea of how your partner envisions retirement can also help you align your goals and savings.

“Get that other person on the same page with this vision and say, ‘Look, if this is our vision, if this is what we want, we need to spend less here. Let’s envision this together,’” Ford says.

You’re not limited to talking about retirement with significant others—you can start a conversation about retirement and bounce ideas off any friend or loved one. Maybe even create your retirement vision boards together. Your friends might have ideas for retirement that you hadn’t considered.

You can also talk with people in your life who are already retired to see how they approached it. Ask what they did right—or what they wish they knew sooner or did differently.

8. Work with an expert.

For additional guidance, shop around for a financial advisor who’s a Certified Financial Planner (CFP), and set up a meeting to review your retirement savings plan. A good advisor can help make sure you’ve done the math correctly and help come up with a plan to get you to your goals.

“Research shows that people who work with a planner are a lot more likely to hit their retirement goals,” Ford says.

Once established, it’s a good idea to review your retirement plan with your advisor at least once a year.