It can happen to almost anyone without proper guidance: you get so caught up in your responsibilities (both financially and otherwise) that you overlook retirement, either partially or completely. If this has happened to you, you’re not alone – statistics show that an alarming majority of Americans are woefully under-prepared for their Golden Years.
Thankfully, it is possible to play retirement catch up, and to properly build a nest egg, even if you’ve procrastinated.
Here are some smart suggestions on how to play retirement catch up:
Take advantage of catch up contributions
If you’re age 50 and older, the IRS offers catch up contributions for certain tax-advantaged investments (like your 401k or IRA). This allows you to contribute more than the normal contribution limits for these accounts as you edge closer to retirement.
If you want to play retirement catch up, this can be a great way to close the gap. Both IRAs and 401ks allow tax-free growth and compounding to build your nest egg quicker. Although you won’t get to fully harness long-term growth in your 50’s, the extra wealth invested can help mend the gap.
For 2017, the IRS allows for an additional $1,000 to be invested in your IRA (both traditional and Roth), and $6,000 for 401ks. You can see their page for more details.
Consider part-time retirement
Just because the government says you can retire at age 65 (at least, in a financial sense), it doesn’t mean you have to. Many find part-time retirement to be an appealing option, and not just for financial reasons. It can allow you to find purpose through a part time job, while also benefiting from more time off.
If you want to play retirement catch up, it can also let you partially gain income, either to invest for retirement or to pay for living expenses. To see how this could impact you, calculate the income of a part-time job into your retirement roadmap.
Meet with a trusted financial advisor
If you haven’t already, consider meeting with a trusted financial advisor, who can help you develop a game plan to play retirement catch up. The right financial advisor can look at your financial needs and goals in retirement, and create a customized game plan to reach them, even if you’re behind.
How can we help?
At LexION Capital, we’re fiduciary advisors who meet individually with our clients to help them achieve a worry-free retirement. If you’d like to learn more about our services, don’t hesitate to start a conversation today.
