A version of this article was originally written for & published on Business Insider
If you want to plan well for retirement, you probably know you should start saving as soon as possible and take advantage of benefits like an employer-sponsored retirement plan… but beyond that, it’s not easy to get clarity on what you should do for an event that might be 20 or more years into the future.
Don’t let that stop you from getting proactive and staying engaged in the process, though. With a little help, retirement planning can feel less overwhelming.
You can start by making sure you’re not leaving any major planning to-dos undone. Here are 3 things that should be on your radar, but that I often see 30- and 40-somethings forget about when it comes to saving and investing for retirement.
1. Contribute to more than just your 401(k)
Vehicles like 401(k) plans and other tax-deferred retirement accounts like traditional, SIMPLE, and SEP IRAs are very useful tools that can help you build the nest egg you need to fund your life after you stop working.
You absolutely should take advantage of them… but if you only put money meant for your retirement years into that kind of vehicle, you may limit how you can access or use those funds without penalty.
The rules for accounts like 401(k) plans say that you cannot withdraw funds without penalty until age 59 and a half (although workarounds do exist, but they can get complicated and come with their own pitfalls).
That’s an issue for a lot of people in their 30s and 40s, because some form of financial independence or early retirement is becoming an increasingly popular goal. And if you want to retire before 59 and a half, then you need to have funds that are accessible outside of accounts that could penalize you for dipping into them before an official retirement age.
So remember: contribute to retirement accounts and also other investment vehicles, like brokerage accounts or equity compensation plans to name just two possible options that might be available to you.
2. If you don’t pay taxes today, you’ll need to pay them tomorrow
We all know the only certainties in life are death and taxes. More 30- and 40-somethings would do well to remember that when contributing to tax-deferred retirement accounts.
Remember, the money you put into your traditional IRA or 401(k) that didn’t count toward this year’s taxable income will be part of your taxable income in retirement. That’s not a reason to avoid contributing to or even maxing out these accounts, but don’t forget that reality.
It’s smart to think about how you’ll get money into various accounts that are taxed differently so that you have a mix to pull from in retirement.
You could contribute money to a Roth IRA (or the Roth portion of your 401(k) if your plan offers the ability to split your contributions between pre- and post-tax dollars), or do backdoor Roth contributions if you earn too much to contribute directly to a Roth.
You could also look at leveraging an HSA, which is the only account that allows you to put in pre-tax dollars, grow your earnings tax-free, and not pay taxes on withdrawals so long as you use that money on qualified medical expenses (or are over 65 when you take out funds).
And don’t forget about taxable brokerage accounts. While you don’t get any tax benefits for contributing here, brokerages come with no limits or rules on how or when you can use the money you invest. It’s yours to use as you’d like, before retirement or after.
3. Goals, values, and people all change over time
Perhaps the biggest thing I see 30- and 40-somethings forget about when it comes to retirement planning is the simple fact that life changes and evolves over time.
As Harvard psychologist Dan Gilbert says, “human beings are works in progress that mistakenly think they’re finished.” Your hobbies, interests, and values may shift. Your health could change. Your priorities may evolve as you accomplish and experience more throughout your 40s and 50s.
What does this have to do with your retirement planning? At first glance, it seems like “not much.” But the fact that the person you are today may not have much in common with the person you’ll be at 65 has massive implications for your money.
No one has a crystal ball to consult to figure out what kind of person they’ll be in the future; the only thing we can bet on is that we may not want the exact same things that we desire today. And your financial plan must account for that reality.
How? By building in wiggle room. By allowing for the financial flexibility to change your mind, your goals, and how you want to use your money.
In practice, this most often looks like planning conservatively. At a basic level, this means overestimating your expenses and underestimating your income.
It means not assuming that everything will always go your way and work out perfectly. It’s saving more than just the bare minimum so that you have more than you need, no matter how your retirement may unfold.
Want more financial advice you can actually use? Beyond Your Hammock is a fee-only financial planning firm for motivated professionals who want to use their money as a tool to build wealth and enjoy life.