Here we are, at the beginning of a new year, when many of us resolve to do better — to eat more sensibly, exercise more, spend more quality time with loved ones, and make smarter financial moves.

One of the smartest financial moves you can make is to be planning, saving, and investing for your future, to make your retirement as secure and comfortable as possible. It’s smart to start when you’re young, too — not just when you’re, say, in your 40s. Starting even at 25 can be a powerful move, as your invested dollars will have 40 years in which to grow before you hit age 65.

1. Have a plan

Many people who are saving and investing for retirement are doing so without a plan, which can be dangerous. Ideally, we all should have a solid retirement plan, reflecting how much money we’ll need in retirement, how we’ll amass the needed funds, and how we will take withdrawals in retirement so that we don’t run out of money too soon.

As you estimate how much income you’ll need in retirement, remember that retired life is different from working life, and that your spending needs will likely evolve over time. You may spend a lot on travel in the early years of retirement, but you’ll likely spend less as you grow older and perhaps less healthy.

Be sure to factor inflation into your plan, too — as it’s more damaging than it can seem. At an average annual rate of 3%, it can cut the buying power of your nest egg roughly in half over 25 years.

2. Think about your withdrawal rate

A key part of your retirement plan should be your withdrawal strategy. A longtime rule of thumb was the “4% rule,” which suggested that if you withdraw 4% of your nest egg in your first year of retirement and then adjusted subsequent annual withdrawals for inflation, you’d stand a good chance of having your money last 30 years.

Don’t trust that or any other fixed withdrawal rate blindly, though. The 4% rule might still fail you — especially if your retirement is very long or if your nest egg shrinks a lot due to a market downturn early in your retirement. You might play it safer with a smaller withdrawal rate, such as 3% or 3.5%, or you might withdraw less during bear markets and more during bull markets.

3. Don’t neglect healthcare costs

Be sure to plan for healthcare costs in your retirement, and hefty ones, at that. Some of us might remain fairly healthy all our lives, but many of us will face health challenges as we age, and they will likely cost a lot. According to the folks at Fidelity, “An average retired couple age 65 in 2022 may need approximately $315,000 saved (after tax) to cover healthcare expenses in retirement.” That doesn’t even include over-the-counter medications, most dental services, and long-term care.

You might want to look into long-term care insurance, too. Wealthy folks arguably won’t need it, as they can pay for long-term care if and when they need it, and lower-income folks probably can’t afford it. But those in the middle should consider it. Note, too, that it can cost a lot less if you buy it when you’re still relatively young, such as in your 50s or even your 40s.

4. Be smart about Social Security

You’ll need to make smart Social Security decisions as you age, too. Know that you can start collecting your full benefits at your full retirement age, which is probably 66 or 67. But you can start the benefits flowing as early as age 62, and as late as age 70. Starting early will make your checks smaller (but you’ll receive many more of them), while starting late will make your checks bigger.

It’s important to put a lot of thought into when you’ll start collecting, as there are pros and cons to any choice you make, and many thousands of dollars in total benefits collected may be at stake. You can also aim to enlarge your benefits while you’re still working, by maximizing your earnings and working for at least 35 years.

5. Consider other income streams

Finally, it’s very possible that Social Security alone won’t cover your income needs in retirement — even when combined with your savings. Recently, the average monthly retirement benefit check was only about $1,678, or about $20,000 per year.

Many people will need additional income streams in retirement, which could take the form of pensions, annuity checks, dividends, or interest payments, among other things. You might even need a part-time job for a while in retirement, or a side gig or two. Taking on a side gig while you’re still younger and not yet retired can be a savvy move, too, as it can make available more funds for long-term investing — to fatten up your nest egg.

No matter your age, consider making some smart moves now and in the years to come to build a more financially secure future for yourself.

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