One expert says it’s the “biggest retirement decision you’ll ever make.”

As people prepare for retirement, there are many issues to consider, but one tops them all, according to an expert.

“Where you live may actually be the biggest retirement decision you make because of differences in taxation in different states,” Silvur founder and CEO Ryan Horgan told Yahoo Finance Live (video above) when advising people nearing retirement about how they should have it. Plan ahead.

The second biggest decision people have to consider? Health Care.

“With the average retiree spending over $5,000 a year on healthcare and retirement costs, this is something they really need to plan for,” said Horgan. And so I think for a lot of retirees, as these numbers become more visible to them, they’re taking a more proactive step and adding retirement healthcare costs into their budgets.”

Horgan offered three more tips on how to save more for retirement in 2023, especially after a faltering stock market in 2022. Here’s what she had to say.

Elderly men walk inside the abandoned John Knox Village, a retirement community in Pompano Beach, Florida, March 21, 2020 (Photo by Chandan Khanna/AFP via Getty Images)

Know where you stand today

It’s hard to know where you want to go if you don’t know where your savings are today.

“Update your account balances. Again, if you’re working on last year’s numbers, they may not be correct. So update the numbers,” Horgan said.

For example, those who stopped looking at their 401(k) or other retirement account balances after a dismal first three quarters of last year might be surprised to see that their balances rebounded some in the last quarter. For example, the S&P 500 rebounded 7% in the fourth quarter after falling 25% over the previous three quarters.

Understand your spending

In addition to calculating checking account balances, Horgan told Yahoo Finance Live that consumers should also track their expenses. While inflation slowed to 6.5% in December, it can still affect people’s monthly budgets.

“When you update your numbers, don’t just think about updating your financial savings numbers, but think about spending. Spending is really about making sure you understand how the inflationary environment affects what your monthly spending is and what it’s going to be in the future,” said Horgan.

Mature man wearing glasses working on personal finance at home

(Image credit: Getty Creative)

Calculate your retirement income

Workers should not forget to add expected Social Security benefits to their other sources of retirement income to get a clear picture of what to expect in retirement. The recent increase in Social Security’s cost of living should help increase people’s final income in retirement.

“I’m also thinking about retirement income, and getting a check to see what your retirement income looks like. Last year, Social Security increased your cost-of-living adjustment by about 8.7%. So it’s likely that your expected retirement income will actually be higher than it was last time. which I checked,” Horgan said.

(Image credit: Getty Creative)

(Image credit: Getty Creative)

Despite concerns that people may not have enough saved for retirement, Horgan said it’s never too late to start investing to save for the future.

“I think as we start the year for consumers, the key thing to think about is that most consumers have time on their side. Getting invested is really critical at this moment in time,” said Horgan.

She stressed that investing for retirement is a long game, so forget about the daily market fluctuations.

“Most retirees really think about investing over 10, 20, 30 years,” Horgan said. “This isn’t about timing the market perfectly, but thinking about putting your capital to work over the next couple of quarters.”

Ella Vincent is the Personal Finance Correspondent at Yahoo Finance. Follow her on Twitter @tweet

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