Photo Credit: Hermes Rivera via Unsplash
You’ve done all the right things – worked hard, handled your responsibilities maybe even raised great children (and we all know how tough that can be!) But what do you do when it’s time to think about retirement, and you find yourself over 50 and your 401(k) just won’t cut it? It can be a scary place to be sure but there are things you can do right now to better your situation.
- Increase the savings in your non-retirement accounts and increase how much you put away in your regular “post tax” savings account in addition to ramping up your retirement contributions.
- Invest your funds for growth and tax minimization. Now is the time to maximize the efficiency of your money and not the time to take unnecessary risks.
- Max out your 401(k) now including the Catch Up Provision for people age 50 or over (For IRAs that means you can contribute $6500 rather than $5500 and for a 401(K) that means you can contribute $24K instead of $18K max).
- Do a projection for your future income including any retirement, social security etc. you will receive and the expected tax rate you may be in once retired. Consider the time frame available to save and use this projection to determine the best tax minimization vehicle to use – whether saving taxes now for more cash flow to contribute to traditional retirement accounts, or saving taxes at retirement in order to get tax-free income from Roth accounts.
- Work with a financial professional who can create a targeted end goal for the time you have remaining at work and who can select investments that will minimize the risk while getting you to your goal.
- Consider your expenses and figure out what you still be paying for upon retirement. Try to pay off or reduce your costs now, while you’re still working in order to decrease your financial need upon retirement.
If you find yourself over 50 and worried about retirement and would like to reach out to us – please email us here. We have a lot of great strategies for you and even have a unique set of strategies for Hollywood union members.
