Retirement seems very far away when you are in your early forties. This period starts to feel closer as you reach your fifties. It’s not too late to take some steps to catch up if you find that your savings are not where you would like them to be.
Take Control of Spending
No one likes to hear this, but the quickest way to save more is to spend less. Lower your cost of living so it’s a bit less and it will allow you to save more now, and it will cost you less to maintain your lifestyle in retirement later.
Reduce Debt
You don’t want to enter retirement carrying a lot of debt. Credit cards can be a factor here, but your largest debt is likely your mortgage. You can shave thousands of dollars off your essential budget each month if you can pay off your home before you stop working.
Educate Yourself
Learn about retirement accounts and how they change as you approach certain ages. Online content, books, and courses are all great resources, but it can be tough to know which advice applies best to your personal situation. Professional consultations from a retirement planner can help guide your decisions.
Focus on Your Career
For most people, earning ability is one of their biggest assets, so don’t be too quick to give up that job. Finding work that you enjoy might be the perfect solution. You may find that you want to stay in the workforce longer if you enjoy what you do, and there are some benefits to that.
Invest and Save Rather than Speculate
You should be able to rely on your retirement funds, so now isn’t the time to speculate. Learn what it means to build a portfolio and then start to construct one that meets your goals. Don’t rely on “investment experts” who make unrealistic promises. And remember, there is no such thing as a free lunch or a perfect investment. No safe investment can guarantee that the rate of return won’t be lower than inflation and that you won’t lose purchasing power over time. Your best option is to create a broadly diversified mix of investments with an acceptable level of average risk if you are still starting to invest.
Catch Up
The IRS increases contribution limits for tax-advantaged retirement accounts starting in the year you turn fifty. You can save an additional $1,000 in an individual retirement account, or $2,000 total if you are married and both you and your spouse are fifty or older. The additional contribution limit for individuals over fifty in 401(k) accounts is an extra $6,500 for the years 2021 and 2022.
Retirement Calculators: Caveat Emptor
Caveat emptor loosely means that you are ultimately responsible for checking the quality and suitability of the item before purchasing it. In this context, it means you are ultimately responsible for determining if an online tool is reliable for making decisions.
Review Your Plan Regularly
The more often you look at your finances, the more likely you are to make progress. Consider working on a retirement planning checklist. After finishing the checklist, start to conduct annual or even semi-annual reviews. Start from the top and work your way down, updating it as you progress.
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Source: https://www.thebalancemoney.com/retirement-planning-in-your-50-s-2388488
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