Turning 50 is a big milestone in your life. For retirement planning, it can be a time of realization and worry for those who know that they do not have enough saved. Perhaps, you have not begun to think about it, but all of those candles on the cake make you realize that retirement is now something that you need to think about seriously. What should you do if you find yourself with a less-than-stellar nest egg at this time?
Take Advantage of Retirement Savings Plans
If your employer offers a 401k, you should make sure that you utilizing 401k contributions. It is also time to do a checkup and make sure that you are contributing enough. If you have a choice, many financial advisors suggest less risky choices like bonds. In your earlier years, you had time to recover if you took a loss or the market turned volatile. At this point in your life, you cannot afford to take chances, even though the returns will be lower.
Another thing to do is to talk to your human resources department and make sure to take advantage of any benefits they have, such as access to a free financial planner for retirement planning. Don’t pass up free money by making sure you are taking advantage of company matching, too. If contributing more will put the squeeze on you, then you might want to consider a part-time job or adding another stream of income to the mix to allow you a little more room every month.
Increase Your IRA and 401k Contributions
Something magical happens at age 50. The government allows you to turbocharge your IRA and 401k contributions. Whether you have a Roth or Traditional IRA, you can now make an additional $6,500 contribution beyond the $19,500 cap that exists before the age of 50. Also, explore your tax obligations with any type of investment account.
Start Retirement Planning Now
The most important piece of advice if you are in your 50s is to start now. It might seem like something you do not want to face, but you need to know where you stand, so you can develop a solid plan for moving forward. Here are some things you need to take a look at to prepare for setting your retirement goals.
- Will you have a paid-off mortgage?
- Do you have any credit card debt to pay off?
- How much will you get from social security?
- How will retirement affect health insurance?
- What are the benefits of working a few more years?
- What kind of lifestyle do you want to live?
If you have any debt, such as credit card debt, car loans, or other debt, it is time to start paying it off aggressively now. The sooner you are free from debt, the more you can contribute to your retirement planning. Doing anything you can to boost paying off debt and adding more to your retirement savings will pay off big in the end. You might consider looking at ways to trim your budget or add more income streams.
Make a Projected Budget
One important thing to do when beginning the retirement planning process is to make a projected budget. Of course, this will change, but it will give you some solid goals and numbers to work with for now. You should review it at least once a year to see if anything has changed. You also might want to push back your retirement date if it will allow you to take advantage of company insurance and retirement savings contributions for a while longer.
The good news is that all is not lost if you have nothing saved for retirement at this point. Hopefully, you still have your health and can step it up a bit to boost your contributions and trim debt. The most important factor in assuring your financial security is to do it soon and not put it off any longer.