Showing posts with label Additional Income. Show all posts
Showing posts with label Additional Income. Show all posts

Monday, April 6, 2020

5 Ways It’s Not Too Late to Boost Your Retirement Savings

With all of the expert advice out there pushing us to start investing in our 20s and 30s, you might be tempted to think that, if you’re over the age of 50, your retirement savings are a lost cause.

You could not be more wrong about this.

There are plenty of strategic steps that you can take to boost your retirement savings and ensure a comfortable lifestyle. Here we highlight five simple ones available to everyone.

1. Check in with your plan.

Where are you at in your savings goals? Consider how much money you have, and from what sources you’ll draw income: any distributions, Social Security, and any other sources you may have. Estimate how much you’ll have to pay for taxes. Gauge how any investments are performing. Figure out what you can expect your monthly after-tax income to be.

Now is a great time to take the temperature of your retirement portfolio and then consider consulting with an expert to determine if there are any steps you should take to adjust course. There may be options available to you now that you either didn’t have before or don’t know about, and so some expert perspective tailored to your situation might come in handy.

2. Leverage catch-up contributions

Most retirement accounts offer some degree of catch-up contributions once accountholders reach the age of 50. The IRS is actually the main driver determining the limits behind catch-up contributions. These are actually specifically intended to help you ‘catch up’ on the contributions you couldn’t make when you were younger, for whatever reason.

Hand-in-hand with this is the idea of leaving your retirement accounts alone. Resist any temptation to take early withdrawals or otherwise tamper with the money you have already put away; unless, of course you are facing a major emergency, although even then you may want to consider first exhausting all other options.

3. Diversify your assets

Sticking to the usual blend of mutual funds and stocks might only get you so far. Consider diversifying the assets in your retirement accounts to help hedge against risk from any one asset performing poorly.

And if you’ve considered moving away from fiat currency into buying assets like gold or crypto, consider doing so within a self-directed IRA. Doing so can offer you significant tax benefits over a regular purchase, from tax-deferred contributions through tax-free growth.

4. Take on side gigs

Some money coming in is better than no money coming in, and diversifying your sources of income reduces the likelihood of your bringing in no money at any particular point in time. Maybe you start monetizing a hobby you enjoy, or find some part-time work helping people or a business that you love. In today’s gig economy, there are also a ton of work-from-home remote options, many of which could leverage any professional training or work experience that you have.

While many people want to stop working when they retire, it can also be good for your long-term mental health to continue doing something and staying connected.

5. De-bloat your lifestyle

This is applicable to any age, but it might be easier to implement now as your life will depend more closely on you and perhaps your partner, as opposed to children and other surprises that can pop up along the way. If you’re brutally honest with yourself, what do you actually need in order to live in a way that you find fulfilling? And, in parallel, what do you want to achieve in order to have lived a fulfilling life?

For example, many people want to travel, but many don’t know where to start. Instead, they are engulfed by fearfulness regarding how much it may cost, and they never get started in planning out a trip. They spend money somewhat mindlessly on items for their home that they don’t really need or really want, but the habit brings them some immediate novelty. 

What if, instead, they confronted the thing they actually want to do–travel–and mapped out a plan of action to make it happen? What if they moved into an RV and spent their days traveling around the country?

At the end of the day, the single best thing you can do for your retirement is to get clarity on what you want, and to be deliberate about your actions—and where you place the money you have. This will help you reach not just your financial goals, but also your retirement and life goals.

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