Every year, millions of people enter retirement. For those Americans planning to do so in 2022, there are a few things to consider to ensure starting things off on the right footing.

Check Your Plan

A successful retirement begins with a good retirement plan. It’s not wise to leave the safety of a steady income without ensuring your plan is as tight as it can possibly be.

If you already have a plan in place, review it immediately. Plans have to change as the world around us and our situations do, so make sure your plan is up to date before you enter retirement.

Prepare for Inflation

Right now, the cost of living is higher than it's been in a long time, thanks to inflation. With costs on the rise, it’s important that your financial plan account for the fact that your budget might be outdated even by the end of 2022.

There is some good news; Social Security is giving beneficiaries a huge raise in 2022 due to high levels of inflation. But if you plan to retire and sign up for Medicare, you should know that rising Part B premium costs will eat into your benefits, giving you less buying power at a time when everything costs so much money.

Inflation can ruin a financial plan that relies heavily on fixed income investments. Be sure your plan accounts for inflation. Build in some growth assets, so that your income can rise over time to account for inflation.

Pay Off Debt

The best thing you can do for yourself is to enter retirement debt free. While that’s not always totally possible, the closer you can get to it, the better.

Find any debts you can completely pay off and try to do so if possible. The fewer things you have to pay off once your income stops, the more you’ll be able to enjoy the money you’ve saved.

Increase your savings

The IRS has announced that they have increased the amount of money that can be contributed to a 401(k) this year by $1,000 from the $19,500 in 2021 to $20,500.

Contributions to your 401(k) come directly from your salary and are made with pre-tax dollars, lowering your taxable income. A larger contribution to your 401(k) can lower your taxable income even more.

So, if you’re not planning to retire until later in the year, why not go ahead and increase the amount you’re saving until that time.

Plan your healthcare carefully

As we get older, the need for healthcare becomes greater and greater. That’s why it’s important to make sure you have the best plan possible for you.

Make sure your insurance plan is affordable and fits in your retirement plan. For those that have been using their company’s insurance for years, it’s going to take some work.

Finding the right insurance plan will take some research and leg work. It’s going to be frustrating and time consuming, but it’s absolutely worth the time making sure your plan fits your budget and needs.

Consider an HSA

More and more people are starting to use Health Savings accounts (HSAs) as a way to save money, for one particular reason; they offer a triple tax advantage.

Money you put in an HSA reduces your taxable income for the year, your earnings grow tax-free, and you can make tax-free medical withdrawals at any age.

You can make non-medical withdrawals, however, you pay taxes on them AND a 20% penalty if you're under 65.

To contribute to an HSA, you must have a qualifying health insurance plan. That means a plan with a deductible of $1,400 or more for individuals or $2,800 or more for a family. Individuals who meet this criteria may contribute up to $3,650 in 2022, while families with qualifying insurance plans may contribute up to $7,300.

Cut Back on your spending

While you should be preparing to enjoy your retirement and the finances that you have spent a lifetime accruing, it doesn’t mean cutting back on unnecessary expenditures is a bad thing.

Cut the stuff you either don’t use now, or don’t plan to use as much based on your hopes for retirement. Every penny saved now is another penny invested in your retirement.

Switch from cable to a few services like Hulu, Netflix, or Amazon Prime.

Cut the landline and just stick to a cell phone plan that works for you. Be sure to review your cell phone plan to make sure you’re not paying for things you aren’t actually using, including data.

Cut annual and monthly subscriptions and memberships that you’re paying for but not using.