Catching Up On Retirement Planning

If you have realized that you have been a bit late from planning for your retirement, then you may just have a lot of catching up to do. The best time would’ve have been starting 10 to 15 years ago. The next best time you will ever have is now. If you plan to do better on your retirement planning, here are some tips that might just help you save more out of what you earn right now.

Know Your Options

If you wish to do a better job planning for your retirement from now on, then you might want to know more about the options that you may be provided. The best way to do it is to save more than you usually do. But you also have to know where you need to put it into in order for your savings to earn more for you.

The US government has given employees 50 years and older to make catch up contributions on their retirement accounts. Those who are covered by the provision can put in an extra $5,500 on their 401(k), 403(b), or government 457 plan per year. Not only that, those who are 50 years old and above may also put in an extra $1,000 on their Roth or traditional IRA and an extra $2,500 on a Simple IRA. This option has been put in place since 2002 but only around 13 percent of those eligible take advantage of it.

Find Areas To Save

Since you are slowly approaching retirement age, you may also realize that you might be spending less that you usually do. The kids may have grown into adults and have their own lives now. You’d rather be spending your nights at home than going on an all-nighter with friends on the weekends. You may be just about done with your mortgage payments. And if you are still earning the same each year or probably higher, then these translates into possible areas where you may be able to save more. There are many areas that you can look into to save more money that you can set aside for your retirement.

Invest Carefully

Since you are playing retirement planning catch up, every dollar you set aside counts. This means that you have to be more cautious with how you invest it for further growth. It would be better for you to consider investing most of them in safer fixed-income investments rather than high yield but also high risk instruments. Come up with a varied investment portfolio to spread your risk towards a broader spectrum of investments so that the impact of unfortunate hits may not be as serious and as costly.

 

Posted by Ardent Editor on Dec 9 2009 in Financial Planning

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