It’s far too common for seniors to find out that they haven’t saved enough for their retirement when it’s too late to do much about it. Although you should be re-evaluating your investing strategy throughout your lifetime, you should take a closer look at your retirement plan when you reach your 50s. This puts you close to retirement age but still leaves you enough time to create a more aggressive investing strategy.
Getting Started
If you haven’t started saving for retirement, you should get started as soon as possible. Try to pay off your debts first to generate a steady stream of disposable income. You should deposit most of this money in an IRA to help you grow retirement wealth in an account that’s sheltered from taxes. Some people choose a Roth IRA because contributions are made after taxes, and that means distributions aren’t taxed. This can be beneficial in helping you save enough for retirement. There are limits to how much you can contribute to a Roth IRA. Currently, those limits are $196,000 for married couples and $124,000 for single individuals.
Estimate What You Will Need
This is also a good time to determine how much you’ll need for your retirement. After deducting expenses that will be paid off by retirement age, such as an auto loan, determine your annual living expenses for 20 to 40 years. Be sure to add expenses for entertainment, dining, and vacations. This will give you an estimated total you will need for retirement.
Join Your Employer’s 401k
In addition to contributing to your own IRA, you should also join your employer’s 401k plan. By joining as soon as you’re eligible, you’ll benefit from the matching contributions your employer offers. You’ll have this separate retirement account as protection if you suffer losses in your IRA account. When you leave your job or retire, roll over your 401k funds into your external IRA to take those contributions with you.
You can also prepare yourself for full retirement by taking care of your everyday finances. You should start a high-interest savings account and contribute to it regularly. By adding a little money from each pay period, you can build up a substantial emergency savings fund over time. Instead of borrowing or using a credit card, pay for financial emergencies with the money in this account.
“Some information on this website was written by BrandYourself, a non-affiliate of Cetera Advisors LLC” Megent Financial – Ron Whittingham, Investment Executive & Eric Burton, Investment Executive.”