If you’re in your 50s or 60s and haven’t yet saved enough for a comfortable retirement, it’s not too late to make some changes. Here are five moves that can help according to William Schantz of Mid Atlantic Financial LLC:
1. Save more money
If you’re not saving at least 15% of your income for retirement, you’ll need to start doing so. If you can’t swing that much, try to at least save 10%.
2. Invest in a 401(k) or other employer-sponsored retirement plans
If your employer offers a 401(k) or similar retirement savings plan, make sure you’re contributing enough to get the full employer match. That’s free money!
3. Consider a Roth IRA
With a Roth IRA, you contribute after-tax dollars, but your withdrawals in retirement are tax-free. That can be a big advantage if you think your tax rate will be higher in retirement than it is now.
4. Delay claiming Social Security benefits
You can start collecting Social Security as early as age 62, but your benefits will be permanently reduced if you do. If you can wait until your full retirement age (which is 66 or 67 for most people), you’ll get a bigger benefit. And if you can wait even longer to claim benefits, until age 70, you’ll get an even bigger benefit.
5. Make catch-up contributions
If you’re 50 or older, you can make catch-up contributions to your retirement accounts. For 401(k)s and similar plans, the catch-up contribution limit is $6,000 in 2019. For IRAs, it’s $1,000.
Saving more, investing wisely, and taking advantage of catch-up contributions can make a big difference in your retirement prospects. It’s never too late to start!
Why It’s Best to Start Early Planning for Retirement According to William Schantz?
The earlier you start saving and planning for retirement, the more likely you are to achieve your retirement goals. There are a number of reasons why this is the case according to William Schantz:
- The longer you have to save, the more time your money has to grow. Compound interest can make a big difference over time, so the sooner you start saving, the better.
- The earlier you start saving, the easier it is to save more. If you wait until later in life to start saving for retirement, you may have other financial obligations that make it more difficult to put away a significant amount of money each month.
- You never know what might happen in the future. If you start saving early, you’ll have a cushion in case unexpected expenses come up or you need to retire earlier than planned.
- You may need to retire sooner than you think. The average life expectancy is increasing, but that doesn’t mean you’ll necessarily live to a ripe old age. It’s important to be prepared for the possibility that you may need to retire sooner than expected.
- It’s never too early to start planning for retirement. The sooner you start thinking about your retirement goals, the better prepared you’ll be when the time comes.
If you’re not already saving and planning for retirement, now is the time to start. William Schantz says the sooner you start, the better off you’ll be.