The phrase “better late than never” has never been more true than when it comes to saving for your retirement. However, it’s important to note that waiting to save will considerably affect the type of life you can expect to live post-retirement.
For baby boomers, a glimpse into their idea of life during their golden years is not accurately represented in their retirement savings accounts. Only 79% of baby boomers are contributing to a retirement savings plan at all, which may not seem that bad, but take a closer look: 50% of those people have only saved around $100,000 while one third of them have barely even saved $50,000.
If someone retires at the age of 65 and lives well into their early nineties, that money is not going to be enough of a safety net. If you are part of the baby boomer generation and either haven’t started saving for retirement at all, or have only been contributing a small amount of money every month, there are a few ways that you can amp up your retirement savings so that you will be better off after retiring:
Start putting more into a workplace retirement plan or IRA.
The language of 401(k)s or 403(b)s is foreign to many of us. Talk to someone in your company’s human resources department to find out how you can take advantage of making the most out of your contributions. In one year, you can devote up to $18,000 to one of these plans. For individuals over 50 years of age, you are allowed to contribute an additional $6,000 on top of that! Due to your budget, you may not be able to provide the maximum amount of funds, but contributing as much as you can will be beneficial to your financial future. And of course, if your company is willing to match your contributions, make sure to utilize those resources for yourself.
Pay off your credit cards.
This may require that you focus some of your extra money on settling any credit card debt you may have accumulated over the years before you can put any additional money into a retirement plan, but that’s okay. Your post-retirement plans are going to take a huge hit if you choose to pay off your debt later in life.
Think about downsizing ahead of time.
44% of baby boomers plan to downsize their homes and lives after they retire. My advice? Consider purchasing that smaller home while you are still working. All of this extra income you can save by paying a reduced mortgage while you are still working is money that can be invested into your future instead.
Your retirement may have seemed a long way off for most of your life, but, now, it’s right around the corner. If planning for life post-retirement seems rather complicated and overwhelming, consider hiring a financial advisor to guide you through the process. Contact me with any questions you have and I would be happy to start you on your way to a more stable financial future!
© 2016 Carmel Valley Insurance, Inc.
THE INFORMATION ON THIS WEBSITE IS NOT AN OFFER TO SELL OR SOLICITATION OF ANY KIND OF INSURANCE (FIXED PRODUCTS). PRODUCTS AND SERVICES REFERENCED ARE OFFERED AND SOLD ONLY BY APPROPRIATE APPOINTED AND LICENSED AGENTS. THE 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. PLEASE CONSULT A PROFESSIONAL WITH AN EXPERTISE IN THESE AREAS REGARDING THE APPLICABILITY OF THE INFORMATION PERTAINING TO YOUR SITUATION. BY RESPONDING TO ANY INFORMATION YOU MIGHT FIND INTERESTING, YOU AGREE TO BE CONTACTED BY A LICENSED INSURANCE AGENT REGARDING RETIREMENT INCOME PLANNING AND/OR LIFE INSURANCE PLANNING. PERCENTAGES REFER TO EITHER FIXED OR INDEXED ANNUITY CREDITING RATES OR LIFE TIME INCOME WITHDRAWAL AMOUNT BASED UPON YOUR INITIAL PREMIUM AND MAY ALLOW THE OWNER OF AN ANNUITY TO WITHDRAW UP TO A CERTAIN PERCENTAGE OF THEIR INITIAL PREMIUM PER YEAR FOR THEIR LIFE TIME. THIS WITHDRAWAL RATE MAY NOT BE AVAILABLE FOR ALL APPLICANTS AND CAN VARY BASED UPON YOUR AGE, STATE, THE START DATE OF YOUR LIFETIME INCOME, AND OTHER FACTORS. PERCENTAGES CAN ALSO REFER TO POTENTIAL CREDITING RATES FOR AN INDEXED LIFE INSURANCE POLICY. NOT ALL PRODUCTS AND SERVICES ARE AVAILABLE IN ALL STATES. CARMEL VALLEY INSURANCE, INC. IS LICENSED IN THE FOLLOWING STATE: CA. CALIFORNIA LICENSE # 0G89325. NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL. NOT INSURED BY ANY STATE OR FEDERAL AGENCY.
Investment offered through Hermes Econometrics. Hermes Econometrics is registered with the State of California as an Investment Advisor and in the State of Arizona. All information contained herein is for informational purposes only and does not constitute a solicitation or offer to sell securities or investment advisory services. Such an offer can only be made in states where Hermes Econometrics is registered or where an exception from such registration is available, and no new account will be accepted unless and until any and all local regulations have been satisfied. For more information on Hermes Econometrics please visit: www.econ101.com