While it’s best to start saving for retirement as early as possible, the good news is that it’s never too late to start planning for retirement. Photo courtesy of Metro Editorial Services (MS)
By Metro Editorial Services (MS)
Some people do not have the ability to begin saving for retirement early on. Others may have brushed retirement savings aside for so long that they are now worried that it’s too late to begin socking away money for retirement.
While it’s best to start saving for retirement as early as possible, the good news is that it’s never too late to start planning for retirement. If the 40th birthday has long passed and it’s time to finally thinking ahead to retirement, consider these catch-up strategies.
• Research tax-advantageous retirement savings plans. A financial planner can point to the right direction, or consult with an employer about employee programs. Deposit money into a 401(k) or 403(b) plan or another retirement vehicle. Jump on any opportunities when an employer matches invested funds. Investigate an IRA and find out if there are any government incentives. Depending on age, there are opportunities to deposit more money into such accounts than other investors.
• Cut back on expenses. Cutting back on unnecessary expenses is a great way to save more money for retirement. Figure out where you can save some money and then allocate it to retirement savings. Consider reducing insurance coverage on an older car or raise your deductible. Downsize cable packages or skip that costly cup of coffee on the way to work. Perhaps it’s time to look for a smaller, less expensive home or a compact car instead of an SUV. Any money saved now can be a benefit when the time comes to bid farewell to the workforce.
• Delay retirement. Many people who retire find themselves bored and looking for ways to fill their time, and as a result more and more people are delaying their retirement, which also gives them more time to save for that day when they do call it quits. Seeking to work less? Discuss and negotiate a phased retirement with bosses that allows an employee to work for the company but gradually work fewer hours until they retire completely. They may be able to work part-time for several years and retire when most comfortable.
• Consider more aggressive funds. Even if they are 50, employees still have a few decades before retirement, which leaves lots of time to grow their retirement savings. But they may want to consider more aggressive funds that can help them catch up more quickly than less aggressive investments. Just know that aggressive funds may also leave them susceptible to substantial losses.
• Don’t amass debt. Saving for retirement but only paying minimum balances on credit cards is not really saving. Pay down credit card debt before setting aside money for retirement.
Delaying retirement planning may mean employees will have to work a little harder to build up a solid reserve. But by following some financial tips and persevering, they can still enjoy retirement with security