Hitting your 50s may bring you face to face with impending retirement. Wow, how did that get here so fast? You may be equal parts excited and terrified by this news. How can you possibly start saving now for retirement and have a decent nest egg? The answer is, it’s possible. Saving for retirement is more important now than ever, so you have to be diligent about it – especially if you don’t have much of anything saved yet.
There may be many reasons why you’re starting over financially this late in the game: bad investments, divorce, career change…but you do have options to recover from those setbacks and even prosper in retirement. Got an insufficient retirement plan at age 50?Capture the savings potential of this time in your life, where your earning power is at its highest.
Purchase More Insurance
Buy more life insurance than you think you’ll requireto provide for your spouse and children in the event you die. Go beyond the minimum long-term care insurance and do more to protect your home, gaining enough coverage for homeowners insurance. It’s not a popular option, but live within your means!
Start a Side Hustle
While you may tolerate your job, you may want to do something on the side that fulfills you. Think about a special hobby or pastime that you enjoy to convert it into a money-making opportunity. It’s simple these days to start up a small business online without investing a lot into overhead and capital. From selling handmade goods to becoming a consultant, explore all your options and talents. You can always sell your business later if it does well for a nice chunk of change. Put that money into your retirement fund and don’t touch it.
Aim to save 20 percent of your income throughout your 50s. You can save more money in taxable accounts such as brokerage accounts and avoid taking out early cash distributions. If you take out cash from your retirement plan before the age of 59 ½, you’ll be penalized from Uncle Sam as well as with early withdrawal fees.
Contribute the max into your 401(k) – as much as your company match will allow. Do the same for IRA accounts. Don’t assume what you’re currently saving is enough. You have to “catch up” on your 401(k), which is $6,000 above your contribution limits.
Know Your Plan
Whatever retirement plan you choose, stick with it. At your age,you have to continually update, check and verify your plan to make sure it’s going the way you want. Retain the services of a good financial planner or advisor, but be thorough in your researchto select a reputable broker or advisor who won’t take advantage of your situation. You should have access to a qualified investment fraud lawyer in case things don’t work out as you had hoped.