The new year is upon us. For many people, that signals an opportunity to implement new strategies and pursue important resolutions. One of your major goals may be to catch up on your retirement savings. If so, you’re not alone. According to a Gallup study, more than half of Americans are worried about their ability to afford retirement.1
The good news is it’s never too late to take action and stabilize your financial future. Perhaps you started saving for retirement late in your career. Or maybe you suffered some setbacks along the way that limited your ability to save. You can make 2018 the year that you get back on track and take control of your retirement plans.
Below are a few strategies to help you boost your savings and minimize retirement risks. If you haven’t developed a retirement catch-up plan, now may be the time to do so.
Reassess your goals.
Where do you stand in your retirement savings efforts? Do you know if you’re on-track or behind? If you haven’t reassessed your goals recently, you may not have an accurate reading of where you stand. It’s possible that some adjustments to your goals may help you overcome your savings gap.
For example, you could consider working a few extra years before you retire. That would give you more time to save and eliminate years that would have to be funded with your retirement savings. You could downsize to a smaller home. You could work part time or seasonally in retirement.
Evaluate your vision for retirement, and think about ways you can reduce your planned expenses. It’s possible that with some changes, retirement may be more affordable than you think.
Make catch-up contributions.
Saving money may be the most important component of any successful retirement plan. If you retire in your mid-60s, it’s very possible that your retirement may last several decades. As you might guess, it takes a substantial amount of savings to fund a retirement of that length. That’s why it’s so important to maximize your savings as soon as possible.
In 2018 you can sock up to $18,500 away in your 401(k) plan. If you are age 50 or older, however, you can contribute an additional $6,000, bringing your total potential contribution to $24,500. You can also contribute as much as $5,500 into an IRA and an additional $1,000 if you are 50 or older.2
These additional allowable amounts are called catch-up contributions. They’re designed to help those approaching retirement save extra money each year. Look for ways to fit catch-up contributions into your budget.
Retirement planning isn’t just about saving money. It’s also about eliminating expenses. If you have fewer expenses, you can limit withdrawals from your savings and make your assets last longer.
Debt payments are especially dangerous for retirees. Every dollar you spend servicing debt is a dollar that can’t be used to fund your lifestyle or increase your assets. Develop a plan to eliminate debt, starting with credit cards and other high-interest vehicles. Consider consolidating into a debt with a lower interest rate so you can pay off the balance faster.
Finally, there’s nothing saying you have to plan for retirement on your own. A financial professional can help you identify risks and maximize your opportunities. They may be able to help you develop a savings plan, implement an investment strategy and build a solid financial foundation for retirement.
Ready to catch up on your retirement savings in 2018? Let’s talk about it. Contact us today at Thomas Financial. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
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