Tuesday, February 23, 2021

What Can You Do if You Started Saving for Retirement Late?

Despite your best intentions, you might not have been able to save much toward retirement yet, and you might be realizing that it will be here before you know it. Fortunately, there are ways you can begin saving more for your golden years by making some fairly simple budgeting and lifestyle changes right now.

Save More

If you have a Roth IRA or another investment account for retirement, find out if you can have more deducted from your paycheck and put it into the retirement fund. If you don't already have one, it’s time to start a retirement account now. You can open a low-risk investment account that can begin building equity toward your senior years.

Additionally, review your monthly or annual budget to find expenditures that can be cut or eliminated. Then, add those funds to your retirement savings. 

For example, you can cut that morning coffee run by making coffee at home or cut a gym membership by exercising in your house or neighborhood. Then, take the money you saved and invest it. You’ll be surprised how quickly those seemingly small costs add up.

Spend Less

While reviewing your budget, look for ways to trim non-negotiable items. For example, reduce energy costs by turning down the thermostat a couple of degrees in winter and raising it slightly during the summer months. 

Use online coupons or store discounts to save money on groceries or shoes. Consider buying wholesale instead of resale when you can get quality brands. You can also find great deals on housewares and clothing at thrift stores and yard sales.

Earn Extra

If your kids are grown and you have some free time, get a second job for a few hours a week and apply that income to your retirement fund. A financial advisor can explain the amount of added income you can afford to make without negatively impacting your tax bracket. 

You don't have to give up your lifestyle pleasures and leisure time activities, but doing something you enjoy to earn an extra paycheck can be both meaningful and profitable.

Plan Ahead

Start thinking about the kind of lifestyle you want to enjoy when you retire. When you decide where and how you want to live, you can develop a tentative budget. 

Then talk to a financial advisor about how much you’ll likely need to save to enjoy that lifestyle and stick to the budget. They might recommend downsizing your current home or other cost saving measures, depending on your projected income and expenses. 

They can also help you invest and make wise money decisions as you prepare for the years ahead.

You don't need to be wealthy to enjoy retirement. But it does help to prepare now for that special time in your life. Use your current income wisely to be ready when you step down from full-time employment and begin to enjoy the full fruits of your labor.

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