Retirement planning? You just hit that wonderful milestone of 50. No doubt you are wiser and more mature, and your experience puts you ahead of Gen X, Gen Y, and Gen Z. Do you feel that you haven’t saved enough for retirement? Or worse you have not started yet, cashed out, or borrowed against it?
Don’t fret. You still have time. Get your financial goals back on track. There are several solutions that can help you solve your retirement problems. It’s your choice if you want to keep on working after you retire. Better to have a pretty hefty nest egg when that time comes around. Here are 6 tips to help you make the most of your final years in the workforce.
Retirement Planning
1. Time to Catch Up – Use your company’s sponsored 401(k) or other work sponsored to catch up. Participants age 50 and older can add an extra $6000 towards their retirement. Note you are required to contribute the annual employee maximum of $18,000 for 2015 before you can make the Catch-UP contribution.
2. IRA Time Baby – Investors 50 and older can contribute $7500 annually. Investors who max out both their 401(k) and IRA can accelerate their savings by adding more than $25,000 per year to their retirement.
3. Reinvest Your Dividends – If you are self-employed, your company doesn’t have a retirement plan, or you have hit your maximum contributions consider investing in stocks that have an automatic dividend reinvestment plan. Think of dividends as cash flow. You take that cash flow and buy more stocks.
Investing in stocks carries a risk but your return on investment could be higher than your sponsored retirement plan funds. Visit Fool.com to learn how to invest. Fool.com has beat the market in returns for the last several years. Fool.com will give you the basics of investing in stocks. Also, they can guide you on retirement planning. Please get educated before you invest.
What to do Now
4. Cut Expenses – Create a budget and start cutting stuff you don’t need. Reduce or eliminate your cable bills, and utility bills, cancel magazines you don’t read, and pay off those debts. Make it a priority to become debt-free before you retire. It’s foolish to carry debt while your income is reduced. The faster you pay off your debts the more money can go to investing. There is plenty of information out there to help you create a budget and become debt-free.
5. Keep Working – Review strategies that postpone retirement. Learn new skills that keep you in the workforce. Start a side business with one of your hobbies. Become a consultant and market your skills to other companies. You do have a network you can use. Even part-time work can extend your nest egg.
Becoming an entrepreneur is an awesome choice. Venture capitalists and crowdfunding resources are looking for mature start-ups to invest in. Your skill set and experience could give you an advantage in the marketplace.
My mother is 74 years old and she retired 20 years ago. She is running her own internet business and travel company. This supplements her retirement income. So you can keep working and still live the lifestyle you want.
6. Quitting is Not an Option – Many pre-retirees falsely believe that there is nothing they can do to build retirement assets and as a result they do nothing. That is the worst thing that you can do. Nothing doesn’t stop time. You are going to get older. You will have to quit what you are doing someday.
Remember that you are in control of your money. You control what you spend, make, borrow, and invest. Make a plan and stick to it.
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