If you’re in your 40s and 50s, retirement isn’t too far off. Many Americans have not saved adequately for retirement, nor are they well-informed on what retirement may look like for them. Have you been putting enough away to retire?
The good news is, though time is not on your side, it’s not too late to start saving and to catch up. The bad news is, that you cannot afford to make any mistakes. That makes finding and retaining a trusted advisor all the more critical, so you can trust that you’re making wise decisions for your financial future.
At McCabe & Associates, we work diligently with our clients to help them save for retirement, as well as for other goals they want to reach. Here are a few tips from our advisors for those of you who may have some catching up to do:
- Max Out Your Contributions: Your 50s are generally some of your highest earning years. Use that money to your advantage and put more toward your 401(k) and other investment accounts. For 2017, the maximum salary deferral for an employee into a 401(k) is $18,000, but for those who are 50 or older, you can contribute an additional $6,000. If you can invest in an IRA, your $5,500 contribution limit increases to $6,500 after you turn 50.
- Take Advantage of Higher HSA Contribution Limits: If you have a high deductible medical plan, you’re allowed $3,400 to invest in your individual HSA, or $6,750 in a family HSA. Once you reach age 55, you can invest an additional $1,000, which can help you combat medical costs in retirement that aren’t covered by Medicare.
- Stick to Your Budget: Whether tracking on paper or using technology, make sure you’re sticking to your budget, and even thinking of ways you can bring down your expenses. Have the most expensive cable package? Consider going down to the basic level, or cutting cable completely! Any amount you save, put toward your retirement.
- Consider Micro-Investing: Technology is constantly providing us with new ways to make life easier, and Acorns is turning spare change into investments. Any time you make a purchase on a connected credit card, say of 35.19, Acorns will round up to the next dollar and invest the difference. Micro-Investing is the definition of baby steps, but can make an impact over the long-term.
- Get Creative: Do any of your hobbies or skills come with ways to make extra money? Consider teaching workshops or at community colleges, selling collectibles, freelance writing, photography, or other ways to increase your earnings.
Are you on track to reach your retirement goals? We would love to help you. Simply contact our office and meet with an advisor to discuss your goals, and we’ll help you get there.