THE NEW YEAR IS THE perfect time to start getting your finances on track, and that doesn’t necessarily mean cutting back on the things you enjoy. But sometimes getting a handle on your finances can mean a little sacrifice now that will pay off in the future.

Here are five things you can do to improve your retirement finances in 2020:

  1. Convert tax-deferred retirement accounts to Roth accounts.
  2. Be aware of financial and tax changes.
  3. Consider shifting to more conservative investments.
  4. Don’t let fear drive your investment strategy.
  5. Prepare a budget or expense log.

Try these tips to improve your finances after you retire.

1. Convert Tax-Deferred Retirement Accounts to Roth Accounts

Tax-deferred accounts require you to pay taxes when you make withdrawals in retirement. You have already paid taxes on the money in Roth accounts and growth is tax-free. Moving your retirement savings to a Roth account requires you to pay the taxes in the year you make the conversion, but then future withdrawals won’t be subject to income tax. “I would say that this will be a great year to take advantage of historically low tax rates by converting a portion of tax-deferred 401(k)s and IRAs to Roth,” says Lane Martinsen, a financial advisor for Martinsen Wealth Management in Chandler, Arizona, and Valencia, California. “If you keep all money in tax-deferred accounts, that is a significant risk because taxes are subject to change and could be higher down the road.”

2. Be Aware of Financial and Tax Changes

The SECURE Act, which was signed into law on Dec. 20, 2019, increases the age you need to start taking 401(k) and IRA required minimum distributions from 70 1/2 to 72. “Anybody turning 70 1/2 doesn’t have to take a required minimum distribution. They can delay it for another year and a half,” says Jordan Sowhangar, a wealth advisor at Girard in Souderton, Pennsylvania. “They don’t have to pull money out of the account that they don’t need for income.” The SECURE Act also newly allows people over age 70 1/2 with earned income to continue to make tax-deferred IRA contributions and permits long-term part-time employees to join 401(k) plans. Make sure to take advantage of the new retirement account rules in 2020 and beyond.

3. Consider Shifting to More Conservative Investments

Many investors have seen significant gains in recent years, but retirees should still be wary about potential losses. “You may think you can rest on your laurels based on the last year or the last 20 years, but it’s a new decade. There will be more volatility. The best thing a retiree can do is reassess their financial goals, cash flows and investments, but most importantly, their risk,” says Nick Yrizarry, CEO of Align Wealth Advisors in Laguna Hills, California. “It’s time for a fiscal examination and comprehensive planning to make sure your investments are aligned with cash flow and budgets.”

Many people don’t think about how quickly a retirement nest egg can dwindle in a poorly performing stock market. But you can protect yourself from significant losses by gradually shifting to more conservative investments as you age and have less time to recover from market declines. “For those nearing retirement, they need to reduce their market exposure,” Martinsen says. “Traditionally the way that is done is through bonds.”

4. Don’t Let Fear Drive Your Investment Strategy

It’s common to hear a story on the news that makes you want to pull your money out of the stock market. “You should not panic or let short-term volatile market events trigger you to do something that will have a negative impact on your portfolio,” Sowhangar says. “You can pull money out at the wrong time and then you’ve lost out on gains.” Try to avoid making changes to your investment strategy while you are feeling afraid or responding to a specific event. “Work with a planner to make sure you are not having reactions to a short-term volatile event,” Sowhangar says. “Have a long-term plan in place. You still have 20 to 30 years.”

5. Prepare a Budget or Expense Log

You want to have enough guaranteed income to take care of your core retirement expenses. “We help (clients) break costs down to cores of essential costs – housing, food, health care, transportation and the like – luxuries and niceties,” says Eric Bailey, CEO of Bailey Wealth Advisors in Silver Spring, Maryland. “You can manage finances better during retirement if you have a good understanding of what percentage of expenses are each type. Once you do that you can assign capital to provide for each cost in the most efficient way.” Niceties include things like golf, entertainment and your wardrobe, and you should be able to pay for them from your income and earnings from investments. “Luxury items, such as a new car, a diamond ring or a trip around the world, should be purchased when you have significant gains,” Bailey says. “In good times you will do more luxury items. In not so good times you restrict your spending.”