Haven’t saved for retirement? It’s never too late.
Have you saved enough for withdrawals in retirement to close the gap between guaranteed income and what you want to spend? If not, don’t despair.
First, remember, it’s never too late to get on track. That said, there’s no better time than the present. The following suggestions will help you get started.
If you didn’t contribute money for retirement when you were younger, you’ll need to ramp up your current savings to catch up. The following strategies can help you save more.
It’s easier to save money you’re not used to having. Whenever you pay off a loan, receive a raise or bonus at work, or come into other extra cash, consider directing the newfound cash flow directly into your retirement savings account.
You can also maintain your lower pandemic-level spending. Can you take more modest or less frequent vacations? Are you able to minimize dining out or downgrade to a less expensive car?
Is an extra “gig” job or side business possible? Is overtime an option? Airbnb your basement?
Invest for higher rates of return.
If you have the time and tolerance to ride out the market’s near-term dips, you may potentially be able to reap more of the market’s long-term expected rewards by investing more heavily in stocks than in bonds or cash.
Wait to Retire
There are two benefits to postponing retirement. First, you’ll have more years to fund your retirement account. Second, you’ll have fewer years to spend your retirement nest egg. Especially if you keep working and delay claiming Social Security until age 70, it is possible to increase this benefit by up to 24% over what you would have received at full retirement age (age 67 for most).
In summary, if you need to catch up on your retirement savings, there’s no magic wand or time machine. Start now by saving more, investing, and/or waiting longer to retire.
This is intended for informational purposes only and should not be construed as personalized investment or financial advice. Please consult your investment or financial professional(s) regarding your unique situation.