Everyone in the working world is concerned with saving money or should be. Many people look forward to the day when they can retire from work and enjoy their golden years. The key to enjoying those years is being financially prepared for them. Most people start saving when they start working. Whether they’re in their 20s, 30s, or 40s, they all save differently depending on their income and situation. Some people in their 50s still don’t have that plan for retirement ironed out. How much should you be saving in your 50s to be sure you have enough money in your 60s and beyond? Today we’ll answer that question and show you how to be best prepared when it’s your turn to retire.
First and foremost, make the most of your retirement plan. At age 50, you are most probably at the peak of your earning potential. Therefore, your contributions to the retirement plan sponsored by your employer should be optimized with regards to your income. Also, it’s good to increase your saving amount if you are awarded a pay raise. For example, if you put money into a 401k and you’re making around $75000 a year, you could save an additional $2200 dollars with a mere three percent increase to the amount you contribute to that savings program. There is also a government benefit for workers 50 and older that makes it even more beneficial to increase your savings amount. This so-called “catch-up” provision gives a substantial increase to the maximum yearly contribution. Those 50 and over can contribute up to $20000 each year unless your employer imposes an alternate limit. The limit for IRA investments is also increased like
Another reason some people haven’t saved very much by the time they turn 50 is because they spend beyond the limit of their affordability. You should have a defined budget. If you don’t, then it’s time for you to make one. If you do have a budget but it’s not allowing you to save, you need to revise your budget and find more ways to save. Try to eliminate or greatly reduce any wasteful spending habits you have. This might mean eating more dinners at home and less at pricey restaurants. This also might mean cutting back on how much you spend on your children. For example, it might be time to let your kids get some financial aid for their college education instead of you paying all of it outright.
A different way to increase your retirement funds is to invest in a more aggressive manner. It is important, that you don’t let aggressive investing become reckless investing. Don’t be worried thinking you only have 10 or 20 years to invest. A healthy couple in their 60s stands a good chance that at least one of them will live into their 90s, so your investment time table is closer to 40 years. The best choices for investment in your 50s are diversified stock funds. It’s recommended to place anywhere from sixty percent to eighty percent of your retirement investments in these.
There are more ways that you can save, and you should always explore as many options as you can and determine which options best fit your needs and your financial situation. Following these steps will help you move into your retirement years with more cash in your pocket and fewer worries on your mind.
So one of the important thing is, to have your own, individuell retirement plan
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Okay, question - I am 50 YO. I currently have approximately $229K saved in taxable savings (Certificate of Deposit) Accounts and another $308K in my 401(K) plan.
Now, I currently have my mortgage paid off on my luxury two-bedroom, two-bathroom condominium and no outstanding credit card debt. I keep my credit card balance paid off each and every month. Lastly, I just finished paying off my car loan on my new 2010 Honda Civic Hybrid.
My annual property taxes are approximately $1,500 and monthly condominium maintenance assessment fees are almost $200.00. Other than that, my monthly utilities, to include cable TV, high-speed internet access, telephone, mobile phone, gas and electric comes out to approximately $450.00. Aside of that, the only other expenses are my semi-annual auto insurance and annual condominium homeowner’s insurance policies.
With the kind of money I have saved both in taxable and tax-deferred accounts, would it be safe to say I can retire @ 62 without worries? I am in fairly good health as well.