Late Retirement Planning Tips
Simple steps for late savers
The sooner you start putting aside money for retirement, the more you might have once that highly-anticipated day arrives.
Saving for college tuition, purchasing a new home, unforeseen medical expenses, or lifeâ€™s other necessities, surprises, or even enjoyments can cause investors to postpone saving.
Starting the retirement planning process late in oneâ€™s life can be daunting, but it is by no means impossible.
Crunch the numbers
The first step to getting back on track is to put together a budgetâ€”this will force you to focus on your financial situation and can serve as a roadmap to success.
Once you have outlined all of your expenses, simply subtract the total from your net income. The result will give you a clear indication of how much you can potentially save, and also help you identify areas in which you may be spending too much.
Cut Any unnecessary expenses
There are essential expenses that cannot be eliminated: food, electricity, etc. However, most people can identify some areas, like entertainment, that are not vital to oneâ€™s existence and can be cut back on. The more areas you trim, the more money that can be earmarked for retirement.
Take advantage of catch-up contributions
Catch-up contribution limits allow investors age 50 and above to increase their contribution. For example, they could have made an extra contribution of $5,500 to their 401(k) in 2010, equating to a maximum contribution of $22,000.
Source: © 2012 Morningstar. All rights reserved. Used with permission.