A recent Gallup study found that more than half of Americans are concerned that they won’t have enough money for retirement.1 There may be good reason for that concern, especially for baby boomers who are nearing retirement.
A study from the Insured Retirement Institute found that 42 percent of baby boomers have no retirement savings. Of those who do have savings, 38 percent have less than $100,000. And only 38 percent have estimated their savings need.2
Are you one of the many boomers who isn’t prepared for retirement? The good news is that it’s never too late to take fast action and get back on track with your savings. Below are three tips to help you correct course with your retirement savings. You may also want to consult with a financial professional to help you develop a customized plan.
Maximize your qualified account contributions.
Qualified plans such as 401(k) accounts and IRAs are popular retirement savings vehicles. They often allow for tax-deferred growth, which may help you accumulate assets faster than you would in a similar taxable account. Also, your 401(k) may offer matching employer contributions.
One of the best ways to boost your retirement preparedness is to maximize your contributions to your qualified plans. In 2018 you can contribute as much as $18,500 to a 401(k) and up to $6,000 to an IRA.3
If you’re age 50 or older, however, you can contribute even more money. You’re allowed to make up catch-up contributions of an extra $5,500 to a 401(k) and $1,000 to an IRA. Look for ways to trim your spending so you can contribute the maximum levels to your tax-deferred plans.
Look for guaranteed* income opportunities.
Longevity is an issue that many boomers fail to consider. Retirees are living longer than ever. For a 65-year-old couple today, there’s a 73 percent chance that one will live to 90 and a 47 percent chance that one will live to 95.2 Even if you save enough for retirement, it can be difficult to make those savings last multiple decades.
Guaranteed lifetime income can help you reduce the risk that you’ll run out of money in the later years of retirement. You’ll likely have some level of guaranteed income from Social Security and possibly a pension. However, you can use tools such as annuities to convert some of your savings into an income stream that’s guaranteed for life, no matter how long you live. A financial professional can help you determine which type of annuity is right for you.
Rethink your retirement plans.
Finally, it may be necessary to rethink retirement. With some simple adjustments to your plans, you can reduce your future spending and bridge your savings gap. For example, you may want to consider working a few extra years to give yourself an opportunity to save more money. Or you could downsize to a smaller home to minimize your living expenses.
Also, don’t discount the idea of working part time or seasonally in retirement. Many retirees find that they have too much time on their hands. A part-time job can help you fill your empty schedule and give you a stream of income so you can reduce withdrawals from your savings.
Ready to get your retirement back on track? Let’s talk about it. Contact us at Timeless Solutions. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
1http://news.gallup.com/poll/210890/americans-financial-anxieties-ease-2017.aspx
2https://www.planadviser.com/baby-boomers-not-enough-prepare-retirement/
3http://time.com/money/4990121/401k-ira-contribution-limits-2018/
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
17597 – 2018/4/19