Save More for Retirement With These 5 Tips
Posted on June 10, 2018
YOU ARE BUSY WITH YOUR CAREER, maybe buying a home, having kids, saving for college — even starting a business. It is the stuff of life — and retirement often takes a backseat. Suddenly, you are hitting your 40s or 50s, and you realize you have fallen behind on planning for your future.
So how can you catch up? Debra Greenberg, director, Personal Retirement Strategy and Solutions at Bank of America Merrill Lynch says, “Take action now. Even seemingly small amounts can add up over the years, and taking action now increases the likelihood you will be better prepared to meet any unexpected challenges that come your way.” Here are some tips.
- Max out your tax-advantaged accounts.
A 401(k): Be sure you are getting your full company match, if one is offered, so that you are not leaving money on the table. Do not forget: An annual “catch-up” contribution of $6,000 is allowed after age 50.
Roth IRA or Traditional IRA: No 401(k)? Or want to save more? Consider an IRA. If you are married and not working, you could contribute $5,500 to a spousal IRA. Catch-up contributions of $1,000 are allowed after age 50.
- Pay off costly debt.
Paying off high-interest credit card debt should be a priority. Doing so will give you more money to direct toward your retirement.
- Work longer.
If you work past age 65 — or consult as you phase into retirement — “that can potentially give your assets more time to grow before you start drawing upon them,” Greenberg notes.
Working longer can also help you to defer your Social Security payments. Each year you delay taking Social Security after age 62, your monthly benefits grow by about 8%, until age 70.
By downsizing or moving somewhere less expensive, you could reap the benefits of:
- The equity you might have accumulated in your home
- Reduced living costs (like transportation, housing, maintenance bills)
- A smaller mortgage — or if you can buy a new place outright, eliminating a mortgage completely
- A tax advantage if you relocate to a town with lower property taxes — or to one of the seven states with no personal income tax
- Invest for growth.
Many people tend to shift to more conservative investments as they near retirement; others simply have a conservative investing bias. But today’s longer life expectancies mean that your money has to work harder and last longer. “Talk to an advisor about adjusting your asset allocation to pursue more growth, without losing sight of your risk tolerance.,” Greenberg says.
For more information, contact The Menashe Morley Group in the Rancho Santa Fe office 858-381-8113. The Menashe Morley Group, serving the community for over 34 years: David Menashe is a Senior Vice President and Wealth Management Advisor, Bruce Morley CRPC ® is a First Vice President and Wealth Management Advisor, John Naviaux CPWA ® is a Vice President and Wealth Management Advisor, and Jesse Menashe is a Financial Advisor. Merrill Lynch makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) and other subsidiaries of Bank of America Corporation. Investment products: Are Not FDIC Insured, Are Not Bank Guaranteed, and May Lose Value. MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation. Neither Merrill Lynch nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. © 2018 Bank of America Corporation. All rights reserved. ARVQ8GWC
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