Are you getting a late start on saving for your retirement? While this is not ideal, it is not impossible to catch up quickly – if you take the aggressive approach.
People are living longer these days, so even if you thought you would have enough… as you near retirement, you might discover you don’t. If this is you, then consider some of these following options.
Start learning to live with less. Change your lifestyle before you retire. This provides you two bonuses – you can learn to live on less income and you can use this reduction in your current expenses to start putting more money into your investments.
Make sure you are contributing the max to your retirement accounts. This amount will change depending on the IRS requirements each year and your age. Currently in 2008, you can contribute up to $15,500 towards a 401k and an additional $5,000 if you are over 50 years old.
Invest any extra money, instead of spending it. If you get a great bonus at work or an inheritance, invest it all in a retirement account or if you have any debt – pay that off too.
Consider working longer than normal retirement. You can plan to retire at an older age or consider a semi-retirement. If you semi-retire, you either cut back on your work hours, or take a different job that you might enjoy more, but pays less. Some companies even offer specialized phase in to retirement programs.
Be cautious with your investments. If you don’t have much time left, don’t invest aggressively in high risk stocks or funds. You don’t have to be completely safe either, but make sure your portfolio mix is heavier on stable funds. If you are too safe, you won’t be able to adequately build up your nest egg before retirement. Talk to a good financial advisor to find the best mix for your situation.
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