[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]A lot of people reach the age of 50 and realize they haven’t put anything away for retirement yet. While that is not the ideal situation, it doesn’t necessarily mean it’s too late either. Here we will review several ways to start saving today, even if you are nearing retirement.
1. Opt Into a Plan
- Also Read: 3 Reasons Certain Federal Employees Can Retire Years Earlier Than Their Peers Without Penalties
- Also Read: CSRS Retirement in 2024: Are You Making the Most of What This Classic Plan Has to Offer?
- Also Read: Roth IRA Basics for Beginners: What’s There to Learn?
2. Investment with Target Date Funds
Target-Date funds are a great place, to begin with for a novice investor. You pick the year you anticipate retiring, and then the fund builds the best portfolio for you off of that information. Like if you plan on retiring in 2040, let’s say, then most of your money will be put towards stocks currently, and switch over to bonds as you get closer to that date. It is done so to grow your investment as much as possible while mitigating any risk you have for investing.
3. An IRA Not Through Your Employer
You can also look into additional investments with a Roth IRA, not through your place of employment. Roth IRAs are typically one of the best investments because of the minimal amount of taxes you’ll have to pay on that money.
4. Contribute More Than the Minimum
The IRS lets folks over 50 contribute extra income towards their accounts to catch up on any retirement investments they may have missed, surpassing previously established max out amounts. For most 401(k) type plans, including the TSP (the federal government’s retirement savings fund) you can contribute an additional 6,000 dollars per year after the 50 year age mark, and an additional 1,000 dollars per year on any IRAs.
5. Get a Second Job
Your Social Security benefit is based on your 35 highest-earning years average, so contributing more to Social Security by getting a second job can raise that amount when it comes time to collect. Start putting more in now however you can, so you can collect more later when you retire.
6. Get the Right Financial Advisor
Sometimes you need to get some advice and seeking out a financial planner is the next move, especially once you start beefing up the money in your accounts. But be wary of who you seek help from, as fee-only financial advisors are the best way to get advice without commission rates swaying their opinion in a way that could benefit them.
7. Debt Reduction
Of course, the best thing you can do before heading into retirement is to get rid of any outstanding debt, and working to pay off anything you owe should be your top priority. Beyond that, looking to consolidate any debt under a credit company that offers a low-interest rate is the next best thing you can do, as varying rates and accounts are sometimes hard to manage. Setting timelines and goals can also help with debt reduction in figuring out how much you need to spend per month on paying off what you owe. Think of it the same as your mortgage, a recurring bill that never wavers, until you pay off your debt (and your mortgage too) completely.
These are all just tips, of course, and they may not apply to your situation, but figuring out which avenues to pursue in order to reach your retirement goals is the first step you’ll need to take, even if you are past the age of 50.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”36123″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]
