April is Financial Literacy Month, a time dedicated to highlighting the importance of financial literacy and encouraging Americans to establish and maintain healthy financial habits.

You may be wondering if an entire month is necessary to dedicate to this cause, but unfortunately, a devastating number of Americans admit their financial knowledge is lacking. FINRA’s National Capability Study found that nearly two-thirds of Americans can’t pass a basic test of financial literacy.

While you may be confident in your own personal financial knowledge, you may be surprised to learn that you’re unaware of some of the most effective retirement planning strategies available today.

From capitalizing on catch-up contributions to evaluating your risk tolerance as you near retirement, there are several essential steps you can take to help improve your long-term financial plan.

Fortunately, you can take charge now and boost your financial knowledge — and ultimately improve your financial situation — with these four tips:

Prioritize saving.

If you’re still working, you should be setting aside as much as possible for the future. The good news is retirement account contribution limits have increased in 2019:

This year, you can save up to $19,000 in a 401(k) — a $500 increase from 2018. Contribution limits for individual retirement accounts have also increased by $500 since last year, which means you can sock away $6,000 in your IRA.

With retirement drawing near, you should also take full advantage of the catch-up contributions available for both 401(k) and IRA owners, allowing those age 50 and older to put an additional $6,000 in their 401(k) plans and an additional $1,000 in their IRAs.

Create a retirement budget.

If you’re within five to 10 years of retirement, it’s time to create a budget for your golden years. When retirement comes and paychecks stop, if you’re not prepared to live on a budget, you may quickly run into problems.

Evaluate your current income and expenses and determine how they’ll change once you retire. Will you still have a mortgage? Do you have a pension that will start providing you with an income stream?

It’s important to take all of these items into consideration so you can determine the kind of lifestyle you’ll be able to live.

If you’re already retired and have yet to create a budget for yourself, do this as soon as possible. You should already have a pretty good handle on your income and expenses, so creating your budget may mean focusing more on ways to trim unnecessary expenses or bring in additional income.

Consolidate your assets.

Once you reach your 50s, there’s a strong possibility that you’ve worked at a number of places, participated in a number of 401(k)s, patronized a number of banks and brokerage firms and possibly acquired a few different types of insurance policies.

As a result, your financial investments may be scattered, which can lead to ineffective management and unnecessary fees. It’s important to organize all of your financial investments in a comprehensive plan so that they’re working cohesively.

Not only will this make it easier to understand all of the different assets you own, but it will also help you identify any gaps in your financial plan as well as streamline your estate for your loved ones.

Evaluate your risk exposure.

As you grow older and transition into retirement, it’s crucial that your investment approach matches up with your goals and risk tolerance. At this stage in your life, significant exposure to the ups and downs of the markets could lead to a devastating loss if the markets take a sudden downturn.

For most pre-retirees and retirees, reducing the risk exposure is a smart move to help protect money and prevent these significant losses. It’s also important to create an income plan that provides for your immediate and short-term needs while also providing enough growth to hedge against long-term inflation.

Congratulations!

By reading these tips, you’ve made a great first step in increasing your financial education. Now for the real test: Take time to implement the suggestions most relevant to you and sit among the knowledgeable elite, feeling confident and financially prepared for retirement.

Skip Johnson is an advisor and partner at Great Waters Financial, a financial-planning firm and insurance agency with locations in Minneapolis, Richfield, Minnetonka, White Bear Lake and Duluth. Johnson appears regularly on Fox 9’s morning news show. Learn more at greatwatersfinancial.com.