If you’re in your 50s or older, retirement is probably on your mind everyday. Will you be able to retire when you wish? Will you have enough to last you through your golden years?
These questions are not uncommon, but, unfortunately, many Americans don’t have the answers. Even though time is not on your side, it’s never too late to start saving, or start saving more to catch up on your retirement planning. But the bad news is, you can’t afford to make mistakes.
The years leading up to retirement are critical, and you need a trusted guide to help you make wise decisions, remove emotions from your investing, and keep you aligned with your goals. At Cornerstone Advisers, we do this every day, acting as a fiduciary for our clients, meaning we always put their best interest first.
Over the years, we’ve compounded our list of tips for revving the engine on your retirement savings:
- Take the Match: If your employer offers a match for your 401(k) or other offered retirement savings account, it’s basically “free” money available to you specifically for retirement. Take it! Adjust your budget so you can put the full available employer match toward your retirement account.
- Max Out: If you have a 401(k) or IRA, it’s time to max out your contributions. For 2017, the maximum salary deferral for an employee into a 401(k) is $18,000. However, if you’re 50 or older, you can contribute an additional $6,000 to “catch up” on your retirement savings. If you can invest in an IRA, your $5,500 contribution limit increases to $6,500 after you turn 50.
- Be Wary of Your Budget: If you’re not sticking to your budget, or if you don’t have one, get started right away! Use a technology like the Penny app to track every cent you spend so you can determine what discretionary spending items you can cut.
- Don’t Forget about Your Health: If you’re enrolled in a high deductible medical plan, you have the ability to invest $3,400 into an individual Health Savings Account (HSA), or $6,750 in a family HSA. Once you reach age 55, you are allowed to invest an additional $1,000. As we all know, healthcare costs in retirement are incredibly variable, so having these funds available in an HSA can help you combat medical costs in retirement that aren’t covered by Medicare.
- Embrace New Technologies: Have you heard of micro-investing? A new company called Acorns allows you to turn your spare change into investments for your future. If you make a purchase of 29.11 on your Acorns-connected credit card, Acorns will round up to the next dollar, taking that 89 cents and investing it into your chosen account. While these are small amounts of money, they can make an impact over the course of many years!
- Use Your Skills: If you have a teachable or transferable skill or hobby, use it to your advantage! Teach workshops or a class at a community college. Sell the photographs you take, write articles for local businesses, or consider selling any collectibles you have for a boost to your retirement savings.
If you’re nearing retirement, it’s time to up the ante. Cornerstone Advisers would love to help you reach that ultimate goal, and see you retire on your terms and stay there throughout your golden years. Contact our offices to set an appointment with one of our financial advisers.