Welcome back for Part 2. We hope that we weren’t too harsh in Part 1 but the fact is that, if you are near or over 50 and you don’t have a retirement ‘nest egg’ built yet you really have to get your, ahem, stuff together so that you’re not left having to bag groceries when your 72 (not that we have anything against grocery baggers but being able to golf or spend more time with the grandkids might be a better idea, yes?). Anyway Part 2 has more great advice for getting your retirement funding underway today. Enjoy!
You should have set up an IRA account by now (you did do that, yes?) and, now that it setup you should continue to fund it whenever, however and as often as possible. The fact is, if you’re below 50 and if you start this year, if you put in $5500.00 for the next 20 years you’ll have saved $215,000.00 by the time you’re almost 70, assuming a 6% annual return on your investment. That’s nothing to sneeze at and should make you feel a little better.
Frankly if you have the money to put in once you hit 50 and are able to get the extra $1000.00 ‘catch up’ bonus you should actually be able to put away a substantial amount more. If you’re not able to put aside the max every year put aside whatever you can because, when you’re in your 60’s and 70’s, you’re really going to need it and the better off you’re going to be.
If you don’t have a job that offers a 401(k) and matches your funds in contributions it may be time to condenser taking a position with one that does, even if that means a little bit lower take-home pay. Saving for retirement with a 401(k) through your job has some distinct benefits.
1st, contributions are auto-deducted from your paycheck, increasing the odds greatly that you’ll actually put that money away. Also, 401(k)s have a contribution ceiling that is higher than an IRA, which is $17,500.00 per year and, for those over 50, a ‘catch up’ of $5500.00 more. Matching funds from your employer (when available) increase the amount you can put away even more.
Changing jobs to get these benefits can be worth it as a 401(k) can drastically increase the amount that you can save for your golden years. When you have a few minutes find an online ‘retirement calculator’ (they’re all over the net) to see where you stand and get an idea of what more you need to do.
Other opportunities to save include working for a few extra years (sorry but it may be necessary) and moving to an area of the country where the taxes and cost of living are lower. (Research this online. There are always ‘Top 10 Best Places to Retire’ lists floating around.)
Whatever your plans are for the future the time to start financing them is today. Open that IRA as soon as you can and start using it. The more you save now the more you will be able to enjoy your retirement.