Retirement Tips for Late StartersSubmitted by Financial Asset Management Corporation on December 28th, 2015
Given the opportunity, most individuals employed in the workforce today would begin saving while they are gainfully employed. Far too often though, the lure of big TVs, new cars, and family vacations force many to choose between saving and enjoying life. Roughly 58% of Americans 55 and older have less than $100,000 saved for retirement, and only 19% have $250,000 or more. What can you do to catch up now?
Determine the Amount You Need to Retire
No two individuals have the same retirement number. Sit down with a financial advisor to figure out the number you'll need to aim for in order to live the type of comfortable lifestyle during your retirement that you wish. With that number in mind, you can begin an aggressive campaign to pursue actions and goals focused on building up that amount.
Boost Taxable Savings
If you want to really save money for your retirement, you need to lower your current expenses or increase your income. Better yet, do both! Debt elimination is one of the top strategies to execute to boost savings. Start by eliminating any consumer debt that you might have at this time by transferring high-interest balances to accounts with low interest rates. If you can, simply pay these off in full rather than maintaining the debt on low-interest accounts.
Other options include banking any increases in pay you receive while you remain in the workforce. Likewise, you could save your bonuses rather than taking an extra trip or buying a brand-new car. Save where you can, while you can!
Convert Non-Producing Assets
If you can do so comfortably, downsize your home or rent out the extra space in it to either save income or generate a secondary source of income that can be diverted to savings. Should you possess any antiques, jewelry, or other valuable collectibles with no sentimental connection, consider selling them and putting the new assets into your savings.
Maximize Retirement Savings through Employer & Government
Whether you have personal savings funds, employer-funded plans, or are relying on Social Security, you'd be well served in maximizing the amount of money you are directing toward these plans. This period while you're still working full time is the best possible moment to divert excess income to your retirement plans. Every dollar you save today is more you'll have in the future, and less work you'll have to do during retirement.
If you don't already have multiple plans, consider diversifying your investments so you can distribute more of your income across various savings plans. Additionally, if your employer or other retirement plan offers catch-up contributions, take advantage!
Improve Your Future
One of the best things you can do is consider delaying your retirement. By delaying your retirement for a few years, you can increase the monthly payouts you receive from Social Security (because you collect starting at a later date), and you have more time to take advantage of tax breaks and incentives by contributing to retirement funds for a longer period of time as well.
It's not possible for everyone to be a financial guru, but help is available to anyone who needs it. Let Scott Kahan CFP®, and president of Financial Asset Management Corporation, help you develop a game plan that minimizes the impact on your current lifestyle, while maximizing the benefits for your future lifestyle as a retiree. Contact us today.
Founded in 1986, Financial Asset Management Corporation (FAM) is a fee-only financial planning and wealth management firm providing personalized services to individuals, families and small businesses. We are committed to consistently serving our clients and providing the best services possible as defined by both our clients and us.
Unlike other financial services firms, FAM is not part of a large corporation. We work with fewer clients so that each client receives the personalized attention required to provide services of the highest quality. Our loyalty is to you - our clients.
A cornerstone of us providing the best service lies in the fact that all of our wealth managers and financial planners are CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals. This designation requires us to adhere to the following CFP® Certification Requirements: Education, Examination, Experience and Ethics.