Retirement Savings Strategies for Late Starters

Retirement sometimes seems like an eternity away, but in all actuality it creeps up faster than anyone can imagine. While it may have once seemed like there was plenty of time for saving for those “Golden Years”, for many, time is running out, and they may need to take some immediate action.

If the future retiree is working for a company that has a 401(k) plan, hopefully, they have been contributing for several years. However, if they haven’t, better late than never. They should, however, take the time to do a little research on how much they are contributing, and how much more they could afford to contribute. If there is a company match, they should find out the limit, and make sure that they maximize this opportunity. Doubling the savings through a company match is too good to pass up.

Everyone should try to put a little away in an emergency fund, but it is even more important for the prospective retiree. Even a little set aside each week could mean a great deal when it comes to some major home or car repair. And, where appliances, cars, and other high dollar items are concerned, all those that are going to need to be replaced should be taken care of within the last few working years.

IRAs, both regular and Roth, are great ways to invest. An IRA is tax free until it is time to withdraw. Finding a good investment adviser is the key to determining how to make the fund grow, either through some riskier investments, with some tried and true stocks, or a combination of the two. Contributions to an IRA are tax deductible up to a certain amount, yearly, and if all possible this savings should be utilized to the fullest.

Those that are well within range of retirement should not accrue any further debts if at all possible. Every effort should be made to pay off those already in effect, since paying these is often more difficult on a fixed income. While it may hurt to tighten the budget a little during these pre-retirement years, it will pay off in the long-run.

Unfortunately, there are many of us who go into the retirement years ill prepared, or are late starters when it comes to planning and saving. Since most cannot rely on Social Security to see them through with the ever increasing cost of living, it is even more important than ever to take stock of our assets, and put more away for the years ahead.