Provided by Terry Garland and written by Indigo Marketing Agency, a non-affiliate of First Allied Securities, Inc.
You have three main sources of income in retirement: your retirement plan, savings and investments, and Social Security. A solid retirement plan focuses on the first two and uses Social Security as a back-up.
The Social Security Administration reports 36% of workers haven’t saved any money for retirement. Of those that have saved, many don’t have enough to fund their estimated 20 years of retirement.
If you’re one of these people, don’t panic. There are ways you can catch up for retirement in a hurry. It just requires a little strategic planning on your part. Interested? Check out these 5 ways to catch up for retirement today.
1. Save, Save, Save
Identify ways to decrease your spending, increase your income, and eliminate debt. To decrease spending, look over your budget and cut out items you don’t need. I recommend even cutting items you think you need. This could be cable tv, a monthly house cleaning service, or even your car (if there’s reliable public transportation in your area).
Increasing income may seem out of reach, but it’s the quickest way to save more money for retirement. Here are a few side-hustle ideas to get you started:
- Ask for a raise at your current job.
- Rent your spare room on Airbnb.
- Walk dogs on your lunch break through Rover.
- Drive for Uber on the weekends.
- Use your expertise to build a profitable consulting business.
Once you’ve decreased your spending and increased your income, use the extra money to pay off debt. Debt destroys your financial goals—especially high-interest consumer debt. Eliminate it immediately.
2. Downsize Or Relocate
As you near retirement, your housing needs may look different than when you were raising a family. Downsizing your home is a great way to tackle consumer debt and prepare for retirement. Having a smaller yard to maintain and a smaller house to clean can add up to huge savings in the long run. Not to mention it’ll be more practical as you age.
If you currently live in an expensive city, you could save even more by moving to an area with a lower cost of living. The income from selling your home would instantly boost your savings and your day-to-day expenses would be cheaper.
3. Catch-Up Contributions
If you’re 50 or over, you may be eligible to make catch-up contributions to your retirement plan. The maximum amount of these contributions depends on the type of retirement plan you have.
Here are some catch-up contribution limits for 2019: (1)
- $6,000 for 401(k), 403(b), SARSEP, or governmental 457(b)
- $3,000 for Simple IRA or Simple 401(k)
- $1,000 for Roth IRA
4. Push Back Retirement Date
While this may not seem ideal, you’re able to save and invest more money every year you work. You could choose to stay at your current job a few more years or pick up a part-time job. Remaining in the workforce also gives you the option of delaying Social Security. You can start receiving Social Security at age 62, but your monthly benefits increase the longer you wait to file.
5. Get A Financial Advisor’s Opinion
Planning for retirement is often complicated and confusing. You have a clear picture of what you want your retirement years to look like, but you’re not sure how to get there. Don’t be afraid to reach out to a trusted financial advisor if you need help.
At Golden Capital Management, we can assess your current situation and suggest an investment strategy that will help you catch up for retirement in a hurry. Our mission is to help you financially prepare for your retirement years. To learn more about how we can serve you, call us today at (515) 226-0115 or email firstname.lastname@example.org.
Terry Garland is the founder and CEO of Golden Capital Management with more than 25 years of industry experience. He works with individuals, small-to-medium-sized businesses, and medical professionals, including physicians and dentists, allowing them access to a wide variety of specialized services and investment vehicles to fit their specific needs. He graduated from Drake University and attended the Wharton School at the University of Pennsylvania and is a certified wealth strategist and a registered principal. With offices in Des Moines, Iowa, and Carlsbad, California, he serves clients across the country. Learn more by connecting with Terry on LinkedIn.