Personal Finance

3 Year-End Moves to Make for Retirement Readiness

Christy Bieber

Published: December 15, 2024 2:47 pm

With the end of the year approaching quickly, it’s time to check some important tasks off your to-do list to make sure you’re on the path toward a secure retirement. Saving for your later years is a lifelong project, and failing to make these moves now could lead to major regrets later on when you get to your golden years without the funds you need and deserve.

24/7 Wall Street Key Points:

• Retirement is something you need to prepare for throughout your life.
• At the end of the year, you should check your Social Security earnings statement to make sure you’ll receive the correct benefits.
• It’s important to rebalance your portfolio and make sure you’re on track for your retirement goals.
• Also: Take this quiz to see if you’re on track to retire ^(Sponsored)

So, what should you get done before year’s end? Here are three tasks to take care of before 2024 comes to a close.

1. Check your Social Security earnings statement

Since Social Security benefits will probably be an important income source in retirement, it’s crucial that you get all the benefits you’ve earned and deserve. To do that, you need to make sure your earnings record is correct since benefits are based on average earnings throughout your career. If your pay is misreported, it’s much easier to take care of that immediately — when you still have paystubs and bank statements — than to discover decades from now that you didn’t get full credit for the money you made (and paid taxes on).

The good news is that checking your earnings statement is easy. Just log into your mySocialSecurity account or create one if you don’t already have one. After logging in, you’ll see the option to “Review your full earnings record now.”  If you haven’t reviewed it recently, check all of the listed amounts in recent years to confirm they match up with your records. If they don’t, you can request a correction online or by calling 1-800-772-1213 to talk with Social Security.

2. Rebalance your portfolio

Rebalancing your portfolio is another important year-end move and it’s a vital one to ensure you have the right asset allocation. See, you’ll want to be invested in a mix of different stocks, bonds, and other investments — and the right mix depends on your risk tolerance, which changes as you age.

As you get older, you can’t afford as much exposure to equities because you won’t have as much time to wait out a market downturn or recover from losses. You should move some money to more conservative investments to ensure you’re exposed to the right risk level. Subtracting your age from 110 gives you a quick and simple way to estimate the percentage of your portfolio that should be in the market. Make sure your portfolio matches up and that you aren’t invested in the wrong things just because you haven’t made changes for a while.

3. Evaluate if you’re on track for your retirement goals

Finally, the last key step you’ll want to take is to make sure you’re still on track to accomplish your retirement savings goals by your chosen retirement date.

You can set a personalized retirement goal for yourself based on your planned spending, but you can also follow a simple rule of thumb that says you should save 10 times your final salary by retirement. Using the calculators on Investor.gov, input the amount you have saved and your goal number. Specify how many years you have left until you plan to leave work for good and your projected rate of return.

The calculator will show you how much you must save each month to achieve your objectives. If you aren’t saving the necessary amount, you can rework your budget for the new year to make sure you don’t fall behind.

Taking these three steps now is vital if you want to make sure you end up with the financial security you deserve later. Before the ball drops, make sure you’ve accomplished them all so you can ring in the New Year right.