Tips for those who are behind on their retirement savings
Are you behind on your retirement savings? Don’t worry, you’re not alone. A recent study found that almost half of Americans have less than $10,000 saved for retirement. But don’t despair – there are still things you can do to catch up. Here are some tips for those who are behind on their retirement savings.
Here are a few tips to help get you started.
Set up a budget and start saving as soon as possible.
You’ll be surprised how much money can flow back into your wallet by eliminating some unnecessary spending. By setting up a budget, you can figure out what your monthly expenses are and where you can scale back. For example, if you have multiple streaming services, try rotating them as you watch your favorite program. This extra money can be put to better use, such as in savings or allotting the money to reduce the money you owe. Having debt can financially weigh you down, so try reducing it without sacrificing your saving goals. These simple techniques are great ways to save money and reach your goals
Contribute to a 401K or Roth IRA account.
One of the best ways to save for retirement is by contributing money to your 401K or IRA account. A 401K is a retirement savings plan where contributions are made on a pre-tax basis. The money also grows on a tax-free basis but is taxable when the funds are withdrawn from the account. Many employers often match employees’ contributions, which helps employees save even more for retirement.
A Roth IRA is a retirement account that also offers tax-free growth and tax-free withdrawals during retirement. This is because contributions are made with after-tax dollars.
The IRS may set annual contributions on these plans, so be sure to consult with a professional to discuss what options best suit you.
Take advantage of “catch-up contributions”.
This additional elective allows participants, 50 years or older, to make contributions to a retirement plan above the contribution limit set by the IRS.
Employees should check with their employer to find out if such contributions are available and if any limits apply.
Stash the extra cash.
Isn’t it a pleasant surprise to find unexpected money? Instead of spending it, try saving it. Tread found money as a step forward to your retirement goal. This unexpected cash also is money saved due to a sale or coupon on an item you didn’t anticipate. A little can go a long way!
Consider delaying collecting Social Security.
You can start collecting social security as early as age 62, but if time is on your side, waiting until you are 70 can increase your payout by as much as 24%. No matter what approach you take, it’s important to take action as soon as possible. So don’t wait – catch up on your retirement savings today!