Behind In Savings? What Are You Going To Do About It?!

Did you know that 71% of Baby Boomers admit to being behind in saving for retirement? 64% of Generation X only have 10% of their target saved! Worse than that, there are millions of others who don’t even know where they stand. So if you’ve procrastinated, you are not alone! There is hope! You can catch up! But you must take action now! Here are some tips for catching up, even if you are off to a late start.

1. “It All Starts With A Plan… It Wasn’t Raining When Noah Built that Ark!” Unless you have figured out how much you’ll need to save for retirement, your retirement plans are based on wishful thinking. Creating a Financial Plan or Road Map is the best way to succeed. Call your trusted advisor for help now.

2. Maximize Retirement Plan Contributions: A recent study showed Americans contributed an average 7.4% to their 401(k) plan – far less than the maximum allowed by law for most workers. Maximize the value of tax deferral and maximize the value of employer matching contributions by maxing out your 401(k) every year. The same holds true for 457s, 403(b)s, SEP and other retirement plans. It is a no-brainer for anybody saving for retirement – maximize tax-deferred contributions.

3. Catch-Up Contributions: Uncle Sam encourages workers age 50 and older to save more than younger employees by offering catch-up contributions for retirement plans. This can be a big incentive for late savers to get back on track. Consult your accountant or IRS documents for the exact rules and this year’s contribution limits as they change frequently.
4. Scale Down: Most people plan to reduce their expenses in retirement and live a simpler life. Here’s an idea – try scaling down and get used to living on less right now. If that’s impossible, then at least don’t
increase your expenses when you get a raise – instead, sock the money away for retirement.
5. Plan to Work During Your Early Retirement: It is nice to have extra income from working part-time or intermittently in the early years of retirement. Working is also good for you. People who work part-time stay mentally alert and challenged and are better able to maintain a healthy social structure.

6. As a Last Resort Postpone Retirement: The longer you work the fewer years in retirement you must finance from savings. Not only does this lower the savings required, but it gives you more years to continue growing your savings while having your employer cover medical insurance and other expenses. This can dramatically close the retirement savings gap.

The choices you make today profoundly impact your tomorrow. If you can’t seem to get control of all the pieces that will add up to a successful retirement, turn to professionals for advice. Just as some dieters do better in a diet program than on their own, most people do better when they have a professional guiding them.