Your 401(k) is just the beginning: What else can you do to prepare for retirement?

For many Americans, saving money in a 401(k) or an Individual Retirement Account is a crucial part of preparing to retire. These accounts help people to save consistently for retirement over many years.

But these accounts are just a starting point. A strong strategy for retirement takes a multi-faceted approach, with your savings diversified between different types of assets and accounts. This helps reduce the impacts of market volatility and taxes on your overall portfolio.

Yet according to the 2023 Annual Retirement Study from Allianz Life, the majority of Americans (56%) said they don’t know where to start planning for retirement beyond having a basic retirement account like a 401(k) or IRA.1

To move beyond just saving money in a retirement account, here are three steps we recommend that you take.


1. Track your finances

Before you can make plans for the future, you need to know where you are. Start by making a document that lists all of your assets and financial accounts – checking and savings accounts, investments (equities, bonds, real estate), 401(k)s, IRAs, college savings plans, and any other financial vehicles. Note the current value of the assets in each of these.

At the same time, look at any automatic savings or recurring transfers you have set up. This includes money automatically deposited into your 401(k) from each paycheck, or transfers into an investment account. Understanding how much you are saving will help create projections for your future.


2. Solidify your financial goals

It’s common to have a lifetime goal of setting yourself up to have a comfortable retirement. But what constitutes a comfortable retirement can be vastly different between people. In order to create an effective financial plan, you need to solidify that overall “comfortable retirement” goal as a series of more clearly defined, actionable goals.

Think about what a comfortable retirement would require for you. It may include things like paying off a mortgage, purchasing a new or second home, traveling in the U.S. or internationally, buying a boat or an RV, or spending more time on hobbies and activities. All of these will affect how much retirement income you’ll need.

Your ultimate goal for a comfortable retirement may break down into smaller goals for each of these activities. Consider using our Retirement Income Calculator as a planning tool to help determine the amount you need to save for retirement.


3. Create a plan with a financial professional

Once you have already done some of the work to understand your own finances, a financial professional can use that information to help create a plan that will help move you toward achieving your retirement and financial goals.

Your financial professional will help assess your current financial situation and projected retirement income, estimate your Social Security benefits and future health care costs, and determine if there’s a shortfall between your future potential income and the cost of the lifestyle you want to maintain. Together, you’ll determine the incremental steps necessary to potentially achieve your desired retirement.

An important part of this planning will be determining how, as you near retirement, to shift from the accumulation stage to the withdrawal stage – deciding the most efficient way of using your assets to provide income, while minimizing taxes and preserving more of your overall nest egg. These steps could include increasing contributions to your 401(k), opening new investment accounts, or adding products like an annuity or fixed index universal life (FIUL) insurance to your portfolio that can provide other financial benefits.

Just as there’s no single definition of a comfortable retirement, there are options for potentially achieving your goal. It’s the job of your financial professional to help you see the best path forward for you.

The more you plan for the retirement you want, the more possible that retirement becomes.

1 Allianz Life conducted the online survey in February and March 2023 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50K+ (single) / $75K+ (married/partnered) OR investable assets of $150K.