Wealth Enhancement Column: A guide to retirement savings in your 50s
For many of us, retirement becomes a very real thing as we enter our 50s.
Whether that means you're planning to leave the working world in five years or 15 years, this is a time when we really start to think about what our retirements will look like and how much we'll need to save to get there.
How many of you who are reading this and are comfortable with the amount of money sitting in your retirement savings accounts? We hope that all of you are, but if anyone out there is concerned about how much time you have left to save for your golden years, we have a few tips to help you catch up.
Take Advantage of Higher Contribution Limits
When you hit the big 5-0, catch-up contributions allow you to save an additional amount in your 401(k), IRA, Roth IRA and other investment accounts to literally help you catch up on your retirement savings. For 2018, anyone over the age of 50 can contribute an extra $1,000 to their IRA or Roth IRA and an additional $6,000 to a 401(k) or 403b.
We recommend that you contribute as much as you can if you are concerned about having enough put away from retirement.
Stash Away Any Bonus Income
If you earn bonuses, get a raise or receive an inheritance, do your best not spend it. As much as you may want to spend the newfound income on a nice vacation or new car, that money can be put to much better use as an investment that can earn you a return to live off in retirement.
This is one of the more pain-free ways to catch-up on retirement savings as it doesn't take away from your regular income, but still allows you to get ahead for retirement.
Stay On Top of Your Investment Fees
All investments come with a cost, but if you're paying too much in fees without getting any added value it may be time to look at a new strategy. Consider working with an investment manager who also has access to other services for that similar fee, such as tax specialists, financial planners and estate planning experts. Investment managers with offerings like these can help you save in other places, making those fees earn you more than just your investment returns.
Start With a Part-Time Retirement
If you do all of these things and still are coming up short, you may want to follow a more recent trend for many retirees by easing into retirement by working part time. While retirement is something many of us look forward to, it can be harder to leave our jobs than we first realize. By transitioning through moving from a full-time to a part-time job, you can keep continue to save, while still enjoying some well-earned time off. Then, when your retirement savings account is better stocked, you can feel more confident as a full-time retiree.
If you need help with saving for retirement later in life, talk to an adviser about ways to help bolster your savings so you can have the retirement you deserve.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.