Is It Too Late to Save for Retirement?

You are in your mid-40s, or maybe older,  and it dawns on you that your college days are looking further and further in your rear view mirror and the exit sign for retirement is quickly approaching. As you sit down at your kitchen table to assess your overall financial situation, you begin to ponder the life and financial mistakes you have made. You ask yourself, “Is it too late for me to begin saving for retirement?”, and the answer is no.  You should never feel like you are so far behind that you shouldn’t begin setting goals to achieve your dream of making work optional. Here are some steps to take to get on the right track.

    
• Set Goals (and review them regularly)
The most important thing at the start of the process is to set some defined goals.  You may not be able to accumulate millions, but the key is finding out how much you will need, in addition to social security and other pensions, to save now to help you recreate a paycheck down the road. You can also figure out how aggressive you’ll need to be with your financial plan.
    
• Get Your Expenses In Order
At age 45, the next 15 to 20 years should be your peak earning years.  If you get your expenses in order, you’ll be able to save more of those bonuses and salary increases as they happen.  One of the keys to making up the ground you lost from early compounding of your retirement assets is to minimize your expenses.  This may mean a smaller house, used cars, and don’t expand your lifestyle if your income increases.
    
• Pay Down Debt
As you approach retirement, you want to be sure you pay down all consumer debt.  You also want to work aggressively to pay down your mortgage. If you can’t save up enough money, then reducing overall expenses will be an important part of this equation.
    
• Take Advantage Of Catch-Up Rules
50 is always a big birthday milestone in people’s lives. While you may take a dream vacation or throw a big party, it actually triggers an important switch when it comes to savings.  For both your 401(k) plan at work and for your IRA/Roth IRA contributions, you can start to put away more money into these plans. Once you turn fifty, if you have the cash flow, you should immediately accelerate to the maximum on all of these catch up provisions
    

• Talk To Your Kids
If one of the reasons you are in this bind is because your children are living the good life at your expense, it is probably time to sit down and talk about why things need to change. We all want our kids to have a better life than we did, but it’s not worth jeopardizing our own retirement. Ask a 21 year old if they remember all of the gifts they got from five to ten years old, and they won’t be able to tell you.

    These are just a few of the steps to get on the right track toward a successful retirement, but the key is to remain disciplined and get started right away.

    Investment Advisory Services offered through Retirement Wealth Advisors, (RWA) a Registered Investment Advisor.  Bentley Financial and RWA are not affiliated. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.  This article is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that the author does not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.