If you’ve done any research about retirement planning, you know that it’s NEVER too early to start. In fact, starting to save during your college years is slowly becoming the norm! But what do you do when years turn into decades and you still haven’t started saving for your retirement? If you are in your 50’s and haven’t been able to build up the retirement fund, you’ll need to get started and fast. Here are some tips to help you out!
- Be aware of your timeline. You probably already know that time is not on your side so it’s important to make sure you get the right advice the first time. Consulting a financial planner is certainly your first step. You’ll need to determine when you want to retire by, how much you think you’ll need to live on, and how realistic those goals are. A professional can help you understand what’s possible in your shortened time frame.
- Max out your accounts. Once you turn 50, the IRS allows you to contribute more to your retirement accounts – IRAs and 401Ks. Take advantage of the maximum contributions allowed also know as “catch up” contributions. The amounts can change year to year and vary by account type so make sure you know the correct amount. Once you turn 55, your “catch up” contributions kick in for your H.S.A accounts as well. So, if you have a high deductible health insurance plan, this is another great way to bump up those savings.
- Protect your savings. An unexpected illness or injury can result in additional medical bills that could wipe out your savings. Consider protecting your savings by exploring disability insurance and if it makes sense for you. There is usually a waiting period before your benefit kicks in, so make sure you understand how long you’ll have to wait, and how long you can afford to cover any bills that may come in without wiping out your savings and retirement funds.
- Create more revenue streams. Depending on the type of work you do, you may be able to use your skills to create additional revenue streams to boost your income. Having multiple sources of income can make it much easier to put more funds into your retirement accounts. Are you able to write a book, be a consultant, teach, etc.? There are multiple ways to create more sources of income!
- Track your spending. Make sure you understand how much money you are spending each month and if there are ways to reduce your expenses to increase your savings. You may also be able to downsize where you are living, cut monthly subscriptions that you don’t really need or use, and find more efficient ways to save money like couponing.
Life doesn’t happen exactly how we want it to, and financial setbacks happen, but the important part is you are starting! You can make big steps towards your financial freedom during your Golden Years by starting today. If you have questions about IRA’s or H.S.A’s our team is always here to help!
Vice President, Secretary