Strategies for Late Savers: How to Make Up for Lost Time
May 24, 2013
We all know that it’s best to start saving for retirement at a young age. But what if that isn’t possible? For many, it isn’t; other financial obligations can prevent making retirement savings a priority.
Or maybe these late savers did not have the option of starting a retirement savings account through their employer. Whatever the reason, it’s never too late to start saving. In this article by Dr. Barbara O’Neill from eXtension, tips are offered to these late savers to maximize their savings in a short amount of time, including:
· Increasing the amount saved each month
· Reducing expenses in order to increase savings
· Accelerating household debt repayment
· Taking on a second job
· Investing aggressively
· Automating investment deposits
· Maximizing tax-deferral opportunities
· Preserving lump sum distributions by using a roll-over option
In addition to increasing savings, late savers should also consider reducing the amount of money they will need in order to retire. Suggested ways to reduce post-retirement expenses include:
· Downsizing to a smaller home
· Moving to a less expensive location
· Delaying retirement
· Working during retirement
· Tapping into home equity thought a reverse mortgage or a sale-leaseback arrangement
· Making tax-efficient retirement asset withdrawals
Using these strategies to catch up on retirement savings takes discipline and may require some sacrifice. But no matter the time, the best day to begin saving for retirement is today!
The information in this post is based on an article written by Dr. Barbara O’Neill on behalf of eXtension. Dr. O’Neill is the FAQ coordinator for the Personal Finance group of the Military Families Learning Network. For more information about the MFLN, read their blog.
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