Once you hit your 50s, retirement doesn’t seem that far off, now does it? While this thought may equally excite and terrify you, the truth of the matter is, saving for retirement is more important now than ever. If you find yourself starting all over again financially at the age of 50, whether due to bad investments in the stock market or divorce, you do have options at your disposal to recover and even prosper in retirement. You just have to be diligent and dedicated in your efforts.
If you have an insufficient retirement plan at age 50, you’re not alone. However, you need to capture the savings potential of this time in your life, where your earning power is at its highest. Browse these tips to get going on your retirement plan:
Up Your Savings Amounts
At this point, you need to save at least 20 percent of your income throughout your 50s. You’ll be OK if you save more money in taxable accounts such as brokerage accounts and avoid taking out early cash distributions. If you withdraw cash from your retirement plan before the age of 59 ½, you’ll be penalized severely on taxes, not to mention early withdrawal fees.
Contribute the max into your 401(k) – as much as your company match will allow. Do the same for IRA accounts. Don’t assume what you’re currently saving is enough. You have to “catch up” on your 401(k), which is $6,000 above your contribution limits for 2015. Check out online calculators, such as Bankrate, that illustrate what you should be saving on a weekly, monthly and yearly basis to hit your retirement goals.
Buy Additional Insurance
Buy more life insurance than you think you’ll need to provide for your spouse and children in the event you die. Go beyond the minimum long-term care insurance and do more to protect your home, which happens to be your greatest asset. Get enough coverage when it comes to homeowners insurance, and live within your means.
Start up a Biz
Do something you love for once. Sure, you may tolerate your job; you may even like your co-workers and boss. But doing something you love is different. As you get closer to retirement, you may come up with a special hobby or pastime that you enjoy to convert it into a money-making opportunity. It’s simple these days to start up a small business online without investing a lot into overhead and capital. Whether you make and sell handmade goods or become a consultant, you can always sell your business later if it does well for a nice chunk of money. Put it right into your retirement fund.
Know the Plan
The key to a good retirement plan is to stick with it. You can’t just establish a plan and let it fall by the wayside. As someone in their 50s, you have to continually update, check and verify your plan to make sure it’s always working the way you need it to. Retain the services of a good financial planner or advisor, but be thorough in your vetting process to choose a reputable broker or advisor who won’t take advantage of your situation. You should have access to a qualified securities attorney in case things don’t go as planned. Contact Thomas Law Group today to find out how we can protect you against excessive or unauthorized trading.