Retirement Planning After 50 Isn’t Impossible.
Many people consider retirement planning something they’ll worry about “later.” However, if you are in your 50s or older and don’t have a plan to fund your retirement, time is running out. Although the best time to start planning for retirement is in your 20s, retirement planning after 50 isn’t impossible. Here are five tips to help you start funding your retirement today.
Determine how much you can realistically save.
How much is enough to retire? Most experts suggest you’ll need at least ten times your yearly income saved at the time of retirement. For many individuals that simply isn’t going to be possible, however, it’s important to track your expenses to get an idea of how much you currently spend. This is also an opportunity to find places where you can cut expenses and place funds in savings instead.
Consult a financial advisor.
Understanding all of the options for funding your retirement can be confusing, to say the least. Fortunately, there are retirement planning specialists to assist you every step of the way. Although many individuals are skeptical of hiring outside help, they are almost worth their fees. In fact, most individuals that hire a financial advisor later in life wish they’d done it earlier.
Maximize your current cash contributions.
If you’re not maximizing contributions to tax-sheltered retirement accounts such as an IRA or 401k, you’re leaving money on the table. In, 2017 individuals 50 or older can contribute a maximum of $24,000 to a 401k and/or $6,500 to an IRA. Therefore contribute all you can, even if that means cutting expenses or getting a second job.
Retire at the right time.
Unfortunately, if you’re in your 50s, savings and investments might not be enough to completely fund your retirement. Many individuals are prepared to work into their late 60s and even into their 70s. Delaying retirement doesn’t just mean more immediate income, retiring later also increases the payout of your social security benefits.
Pay off high-interest debt.
If you’re carrying a large amount of high-interest debt it’s very difficult to save money for retirement. Another obstacle for individuals in their 50s saving for retirement is a home mortgage. In the past, most individuals had their home paid off well before retirement. However, many people today are headed into retirement with at least a moderate amount of mortgage debt. Although some experts argue it’s better to invest than pay off a mortgage, it’s ideal to go into retirement mortgage free.
If you need help getting planning for retirement at any age contact the financial professionals at Potter & LaMarca today.