This Is How Far You Should Be In Your Retirement Planning After Reaching 50
If your financial planner tells you that it’s completely normal to start planning for retirement just months before you’re scheduled to leave the workforce, there is a high chance that they are being dishonest to you. The truth is that starting a savings fund this close your planned retirement isn’t just unrealistic, but borderline impossible.
Too Late for Saving
People who are in their 50’s or 60’s don’t have that much money to catch up on their retirement fund, and if they haven’t saved anything for their golden year so far, chances are that they’ll need to work even past their expected retirement date or lower their quality of life.
These are the cold, hard facts about not jumping on the savings bandwagon earlier on in your life – and you don’t want to learn these when you’re just months away from retirement.
Pittsburgh-based Fort Pitt Capital Group’s Serior VP, Chuck Mattiucci, says that people who come to him just months before they are set to retire are already too late, and there’s nothing that can be done to rectify the situation. There’s not much that Chuck can say to help their future retirees except the fact they should have come a lot more earlier.
By the time workers turn 50, they should already have years, if not decades, of financial planning experience. Your retirement fund should start to mature by that age, and you should start ramping up your monthly contributions to grow your nest egg as much as possible before the planned retirement.
Here’s how far you need to be in your retirement planning by the time you reach the age of 50:
Increase Monthly Contributions
Financial planners generally advise clients to start saving in their 20s to reap the benefits of compound interest. Wells Fargo Advisors’ Dan Prebish says that by the time people turn 50, they should have already maximized their monthly contributions to save up as much as possible for retirement.
Getting in the habit of budgeting can really help future retirees identify areas that can use a little less spending. This will allow you to free up more cash to add to your retirement fund. It’s always a good practice to contribute a little more every year so that by the time you reach the age of 50, you’ve already maximized your contribution limit.
When saving for retirement, make sure that you take advantage of all three tax buckets including tax-free, tax-deferred and taxed. Mims says that employer plans are basically free money which is why there is no reason for workers to not contribute enough to get a full match.
Have an Emergency Fund
Saving just for retirement is not enough, you also need to be prepared for any financial disaster that may come your way before (or after) your planned retirement age. Having an emergency fund is the best way to ensure that you’re prepared for any unforeseen circumstances. According to 2018 report by the Federal Reserve, 4 in 10 people didn’t have enough or any money in their emergency fund to cover an unexpected expense of $400.
Consult a Professional
It doesn’t make sense to wait until the final few months before retirement to consult with a financial advisor. Do it at a much earlier stage in your career so that you have a better idea about how much you need to save in order to sustain your expected retirement lifestyle.
Make sure that your planner is looking at your portfolio at least on a annual basis and making necessary changes to ensure that you meet your goals.
Saving for retirement is much easier when you don’t have any debt to pay off. By the time you reach the age of 50, you should have paid down all your balances so that you have more money to direct towards the retirement fund. Matt Sadowsky from TD Ameritrade advises his above-50 clients to make their debt payments the utmost priorities so that they enter retirement without have to stress about their finances.
More in Retirement
Best Tips for Growing Your Investment Even After Retiring
How can I grow my retirement savings? That is one of the most popular questions we get from our readers, and...January 15, 2019
The Best Way to Save for Retirement? Don’t Think About it
As you grow older, the stress of saving up for retirement begins weighing down on you, but the good news is...January 15, 2019
Another Economic Crisis Could Be on the Horizon, But Where Will it Start?
The banking system has learned some hard lessons from the 2008 financial crisis which shook the global economy to its core....January 15, 2019
These States Are Where Investors Can Get Highest Returns On Real Estate Investment
Investment in equities is undoubtedly simpler than real estate investment. However, there are wealthy investors who prefer real estate investments simply...January 15, 2019
Yen Surges Even As Investors Remain Cautious As A Result Of Volatile Stock Movement
Yen Surges Amid Impeding Factors The index, S &P 500 dropped to its lowest on a 20-month outlook earlier last week...January 14, 2019
Google’s Newest Sister Company Ready to Take Over Cybersecurity Industry
In January, Alphabet, the company you probably think is ‘Google’, revealed a new cybersecurity company, Chronicle, from its X moonshot factory....January 14, 2019
Turkey Currency Fall Increases Concerns Among Investors in Emerging Markets
Fall In Lira Reports indicate that emerging-markets investors have begun taking steps in preparation for an unstable start of a trading...January 14, 2019
Retirement Resolutions You Must Fulfill This 2019
Most people believe that having a career that you have always wanted or a well-paying job means that you’ll be able...January 14, 2019
Can Artificial Intelligence Help Businesses Grow?
Artificial Intelligence is quickly becoming a dominating force in our everyday lives, whether it is in the form of digital assistants...January 14, 2019