5 Ways to Fix Your Retirement Fund Shortfall
When you hit your 40s or 50s the idea of retirement – which seemed so far off in your 20s - is suddenly right around the corner. If you’ve reached this age and have not been diligently socking away money for retirement, there are some things you can do to fix the problem:
- Take a new look at your budget. Retool your priorities, and put the brakes on your spending. It does take a disciplined approach. Many items you’ve previously regarded as necessities can be dispensed with. Doing without a $5.00 cup of coffee every day could add up to an extra $1500 saved at the end of a year. Go over your budget with a fine-tooth comb, and cut out anything that you don’t really need. Put the money you save into your retirement fund.
- Catch-up Contributions. If you are 50 or older, you can put up to $6000 extra into your 401(k). If you have an IRA, the additional catch-up contribution limit is $1,000. Skipping that cup of coffee every day will more than pay for that!
- Open a spousal IRA. A spousal IRA relaxes the requirement to earn an income and gives a husband or wife with low or no annual wages a way to save tax-efficiently. You can effectively double your savings this way.
- Change your investment philosophy. Talk to an expert advisor, and figure what the best strategy is to help you get to your goals. Sound investments that grow and earn income could be a wise move. Think about adding real estate to your portfolio.
- Delay taking Social Security. Work longer, and delay your retirement. This option gives you more years to save and increases the amount you’ll get from the SSA. If you start receiving Social Security at age 62, you’ll get about a quarter less than if you wait until 66. If you wait till you’re 70, you’ll get 132% of the monthly benefit because you delayed getting benefits for 48 months.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC
Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com
Connect With Us