While the most common New Year's resolution is to lose weight, resolutions about money and finances are usually a close second. Believe it or not, our AARP money experts make resolutions about their finances, too. Here's what they're hoping to accomplish in 2013. Consult your financial adviser for advice regarding your personal situation.
Resolution: Start my retirement countdown
As of January, I'm starting my 10-year retirement countdown. Meeting the goal of exiting the workplace at age 65 will require a good researcher, careful planner and smart consumer. My wife and I have already scheduled meetings with our financial adviser and tax preparer to see what changes we need to make for 2013 to optimize our retirement contributions and tax savings. We are also increasing our contributions to our medical savings plan — better to use pretax dollars for clinic visits and prescriptions. We're also on track to pay off all our credit cards and then to pay them in full each month. To avoid impulse purchases and buyer's remorse, we have promised to not make any financial decision greater than $200 without discussing it with each other first, and waiting at least 24 hours.
Resolution: Get affairs in order
I'm going to write a letter of "instructions and suggestions." That's the name my stepfather has for it, and I think it fits. Essentially, it's a road map that tells my husband and kids what they need to know should something happen to me. I've been putting this off for a few years — and it's time.
Resolution: Boost retirement savings
As a self-employed worker, I will earmark a monthly automatic transfer from my checking account to my retirement savings account. The bottom line is that saving for retirement is discretionary and easy to put off. It's not mandatory like insuring my house or my car. When I worked in-house with an employer who matched contributions and automatically took money out of each paycheck, I never even noticed until the quarterly statement landed, and "Wow, look how much I've socked away."
Resolution: Savor retirement
I have been retired from my full-time job for 16 years now. Retirement has given me time to be creative, pursue personal goals and do some of the things I didn't have time for when I worked full-time for 45 years. Retirement gives me a second chance to serve my community, reconnect with family and friends, and, of course, slow down. It's pretty amazing how good it feels to not be in a hurry all the time. I will keep reminding myself in 2013 to slow down and enjoy the time I have with my family and friends.
Resolution: Pay down the mortgage
My New Year's resolution is to knock $50,000 off of my mortgage balance in 2013. Reaching this goal will essentially require my husband and me to double our upcoming monthly payments. While this is an aggressive repayment schedule, the hubby and I are both committed to becoming 100 percent debt-free as soon as possible. Our mortgage is our last big financial hurdle — besides paying for college for three kids and fully funding our retirement. Well, first things first; we'll start paying down that house note!
Resolution: Find more ways to cut expenses
It's time to go over my budget with a fine-tooth comb. Take a look at the insurance, the cable, the phone plans, the shoe bills (!!!), the lawn care — everything. I want to get rid of things I don't need, like my extra phone lines, and start thinking about other spending cuts I'll want to make when I retire. And, I need to quit reading shoe catalogs.
Resolution: Get long-term care insurance
I have been dragging my feet about getting long-term care insurance. As a married woman in my early 40s, I can still get relatively cost-effective long-term care policies and longevity insurance. If I were to become sick with a chronic illness and require in-home medical care, my medical insurance or disability insurance might not cover those medical expenses long term. Long-term care policies are meant to offset those expenses. I need to decide whether my husband and I need individual policies and how much getting this insurance will cost now, versus waiting a few more years or, lastly, exploring other product options such as longevity insurance.
Resolution: Organize receipts and financial paperwork
One of my lifelong struggles has been keeping my personal and business paperwork organized. Someone once told me my home office was in such disarray that it could qualify for government funding to clean up hazardous dumping sites. Yep, it's really that bad. I've put together a three-ring binder for all major purchases I make in 2013. Inside the binder are those clear plastic "sheet protector" thingies where I can just slip the receipt, instructions, warranty information, etc., into a neat little pocket so I'll be able to find them if I need them.
Tara Finnegan Coates is an editor and writer for AARP Media.