4 Strategies for Building Retirement Wealth
Fewer people in the United States are retiring at the age of 65 due to the rising cost of living, and many of them are still working full-time jobs to survive. One 2016 survey by the Pew Research Center noted that the number of working seniors has risen steadily since 2000, with nearly 10 million now working full and part-time jobs. These numbers may seem worrisome if you plan to retire in your 60s, but there are strategies you can use now to build retirement wealth for your golden years.
1. Increase Retirement Contributions After Age 50
You can pad your retirement plan considerably by increasing the amount you contribute once you turn 50. Consider adding bonuses, commissions, and other lump sums of money to your IRA and 401K plans. While putting this money away now might mean sacrificing the possibility of a major purchase, such as a car or a home improvement project, being able to retire at 65 can be the greater reward.
2. Avoid Dipping Into Your Savings
If you are building savings in your 30s and 40s, resisting the urge to dip into your 401K or other retirement savings can prevent a money shortage in the future. Mortgage payments, student loans, and other large bills can be difficult to meet, especially when money is tight, but robbing your future self of funds may mean a later retirement. Some funds also carry heavy penalties for early withdrawal, so revising your budget and leaving your retirement funds alone might be the better route to building savings.
3. Take Advantage of Free Investment Advice
Some 401K programs offer free classes or investment advice for their users. This can be especially helpful if you have only recently opened your account and have no experience with retirement savings. For example, learning about how target-date funds might increase your overall investment over time and why they typically become less risky over time can give you financial peace of mind. You may want to make a list of questions for your advisor before meeting with him or her so you do not forget to discuss what is most important to you as an investor.
4. Find Investment Money Within Your Own Budget
Finding additional funds to add to your retirement savings can be challenging, but you may be able to locate it within your own household budget. This might take some effort; however, it can be worth it if you want to maximize the amount you invest into your retirement plan.
For example, if you live in North Texas, contact your Dallas auto insurance agent and ask about whether bundling your insurance can lower premiums. Look into discounts that may reduce your deductibles depending on your driving record and, if you are already over fifty, whether you can qualify for any discounts offered by retirement organizations, such as the American Association of Retired Persons. You may qualify for more than one discount, so take the time to look over each one carefully with your agent.
Padding your retirement fund can be a challenge at any age. However, when you make an effort to build your savings and remember to be kind to your future self, you can enter your golden years with confidence.
