If you’re in your 30’s or older, you should have already began planning for retirement. But if you haven’t started yet, you’re not alone – according to a study done by the National Institute on Retirement Security, over 45% of working-age households don’t own any retirement account assets.
That doesn’t mean you shouldn’t start as soon as possible however. The sooner you begin, the easier it is to start planning for retirement.
Here are some retirement tips for later bloomers to get you on track financially:
Max out your 401(K) contributions
If you haven’t maxed out your contributions to your 401(k) yet, this is a great way to start playing retirement catch-up. Currently, the contribution limit is $18,000 per year, with an additional $5,000 allowed for those aged 50 and older.
This is included in our retirement tips for late bloomers because 401(k)s allow your money to grow tax-free towards retirement. The money you invest in your account isn’t taxed, and most importantly, its growth while invested isn’t taxed – meaning your money has a better ability to grow. The wealth invested in this account is taxed when you withdraw it as income, but it may be taxed at a lower bracket (because you have less income in retirement).
Consider retiring in phases
Rather than completely retiring all at once, consider a part-time retirement. This has a few benefits: firstly, you can enjoy a portion of your previous career income instead of completely relying on your investments. Secondly, you also get to enjoy some degree of activity in retirement, while also having the time for leisure. Although this is one of the retirement tips for late bloomers, even those who have started planning early will use this tip because they enjoy the sense of purpose part time employment provides.
Come up with a game plan
If you were going on a road trip, you’d want to know your destination and route before you hopped in your car. The same applies for your retirement. It’s vital to have a plan that accounts for your specific goals and needs in retirement, and finds a way to reach them. This one of the most important retirement tips for late bloomers because you need a plan and set goals if you want to have a comfortable retirement.
Want to learn more?
At LexION Capital, we work individually with clients to determine their unique retirement needs and goals, and then craft a bespoke investment portfolio to reach them. Don’t hesitate to reach out to one of our fiduciary advisors today to see if our services might be right for you.
