Steps on How to Greatly Improve Your Retirement Savings Even after Hitting the Big 5-0
If you’re on the verge of retiring and above 50, it’s a given that one of the things you will be focusing on is your retirement savings, especially if they are looking slim!
As a matter of fact, roughly 46 percent of individuals nearing retirement do not have any money saved up for it! Hence, this means that nearly half of all soon-to-be retirees need to improve their savings; lest they plan to keep on working for the rest of their lives!
The bad news is that if you just hit the big 50 and you’re starting to save, the road ahead isn’t going to be easy. As a matter of fact, you’re going to have to work twice as hard to even begin to fathom a retirement surrounded by comfort.
The good news is that there is still a possibility. In fact, if you play your cards right, it might just be possible to make it to half a million dollars saved up by the time you reach the age of 65. That being said, here are some of the ways you can get yourself started on the road to retirement heaven.
Pick up the pace after starting slow
One of the biggest benefits that workers currently in their 50s have over millennials is that they are prioritized as top beneficiaries of IRA contributions and catch-up 401(k). Which means that if you’re over 50, the annual contribution limit and IRA is $24,500 and $6,500. While if you’re under 50, the annual contribution limit and IRA is $18,500 and $5,500 respectively.
While this might be an added advantage for those over the age of 50, it might not be so easy to have about $25,000 saved up every year. Therefore, the best way to maneuver this is by coming up with a goal for the amount of money that you plan to save up every year, and sticking to this goal.
If you’ve not started saving, you can always take the first step by creating a budget and saving the little that you have as you gain momentum along the way
Create a realistic budget
You can do this by first coming up with a realistic budget that dictates all your expenses and how much can be saved up every month. This way, you can be able to cut back on some of the expenses that have hindered you with virtually nothing in your savings account.
Expenses such as going out on an expensive family eat-outs every weekend, or having an exotic vacation can be eliminated for less extravagant expenditures. In some cases, you might even have to reconsider a smaller home so that you can save hundreds, if not thousands of dollars every month when it comes to your mortgage.
Crunch the numbers
Once you have determined how much you can redirect to your retirement benefits, you can then begin calculating the numbers. This way, you’ll be able to figure out how much you’ll have saved up for retirement by the time you’ll be retiring. As a matter of fact, having a retirement calculator is a great way of knowing how much you’ll have once your working period comes to an end.
That being said, the most vital aspect of this setup is consistency. The more consistent you are, the more that saving will feel like a habit. Hence, you will be able to meet your set retirement goal within the specified timeframe.
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