Let’s be honest: not everyone is as diligent with their retirement planning as they’d like to be. With other seemingly pressing expenses to prioritize, squirreling away money for your retirement years might seem like the last thing you can do. While we cannot stress enough the importance of saving for retirement, we understand that certain life events and situations make it difficult to do so.
The unfortunate thing is that according to the U.S. Government Accountability Office, half of people age 55 and up don’t have any retirement savings. Yikes.
What’s even more unfortunate is that the power of retirement planning is time. The earlier you can get started saving up money for when you retire, the more money you will have readily available for living expenses and spending.
So what’s the solution? How can you make up for lost time?
If you have found yourself in a spot where your retirement savings account has taken a hit, then you’re going to want to keep reading this blog as we list out some tips for how you can gain some momentum as you inch closer and closer to retirement age. Don’t hesitate to contact us at Kennedy Wealth Management if you have any questions or if you’d like to speak with a financial advisor.
Save For Retirement In A Short Amount Of Time
Set Your Financial Goals
The very first thing you need to do is figure out what your financial goals are. How much money do you want to have by the time you retire? Now, along with this, you have to be realistic too. If you’re 45 and you’re planning on retiring around age 65, but you haven’t been setting aside consistently or diligently throughout the past few decades, you need to find a number that’s reasonable and attainable given your personal and work situation. Work the numbers and come up with a financial retirement goal to work toward.
Increase Your 401K Contribution
Many individuals have access to a 401K plan through their employer, in which case your employer could be matching your contribution to up to three percent. Essentially it’s free money that will compound over the years, so the earlier you can get started, the better. Maybe you contributed early on, and then life happened and you had to pull back how much you were putting into your account. Whatever the case, the first step you’re going to want to take after setting your goal is to increase the percentage you’re contributing to your retirement plan. While your employer is only required to contribute up to three percent of your compensation, you can still increase the amount that you’re contributing. Depending on the goal you set, you can increase your contribution to up to six percent, 10 percent, or even more. It’s crunch time, so whatever you can put toward your retirement savings, you should. Now is not the time to be conservative with how you save.
Invest In Stock
Even with your 401K contributions, putting money toward stocks and mutual funds could make a big impact. Take the time to do some research about your investment options. A good rule of thumb is 10 percent of your income should be set aside for retirement. If you are contributing three percent of your compensation, invest seven percent in stocks or mutual funds. However, like we stated above, don’t be conservative with your savings and investments. Put as much as you can toward your retirement funds.
Pay Off Any Debt
The last thing you want is to enter into retirement with any financial debt. If you have to decide between investing in your 401K or working toward paying off consumer debt or any loans, choose the latter. Depending on how much debt you’re facing, it can take years to get out of it. With the time you have, ask yourself which would be more beneficial for reaching your goals, and then stay diligent.
Work With A Financial Advisor At Kennedy Wealth Management
The guidance and expertise of a financial advisor can be invaluable as you create a strategy for your retirement. Making up for lost time requires determination, consistency, and diligence, and having the assistance of a professional can benefit you in a variety of ways. Don’t hesitate any longer to contact Kennedy Wealth Management to get connected with a financial advisor. Give us a call today.