Top Ways to Prepare for Retirement if You’re Older
Updated on Dec 11 2018
If you’re 45 or older and have not financially prepared for retirement, you may be starting to worry about the financial implications of retirement. While you may be behind on savings, the good news is that you are not alone - and your situation is not hopeless. Here are four top ways to help you get on track.
The latest EBRI Retirement Confidence Survey found that more than one-third of people between the ages of 45 and 54 reported that they had saved less than $25,000 for retirement. And, more than 25 percent of those over 55 had less than $25,000 saved.
Many Americans put off planning for retirement, exchanging instant gratification for delayed satisfaction. The consequences are serious and can leave retirees with an uncertain financial future. Explore these top ways of saving for retirement - no matter if you’re thirty years away from retirement or ten.
Four Top Ways to Save for Retirement
Saving for retirement is vital to financial success in retirement. How will you care for yourself and your family when you can no longer earn an income? Here are four of the top ways to prepare for retirement now and increase your chances of financial success after leaving the workforce.
1. Contact a fiduciary financial advisor.
The first step in planning to save for retirement is to find a financial advisor. But, not just any financial advisor. When it comes to choosing a trusted advisor for your financial future, it’s crucial to partner with a fiduciary financial advisor. Financial advisors held to a fiduciary standard are legally required to put your interests above their own - even if those interests are in conflict with their own.
2. Save as much as you can, as quickly as you can.
Preparing for retirement now means evaluating your monthly budget and reducing spending as quickly and drastically as possible.
From reducing larger financial obligations to cutting out your daily $5 coffee, every dollar counts when it comes to saving for retirement. Commit to saving at least 10 percent (and more, if possible!) of each paycheck. Once money goes into your savings account, do not touch it. Reserve it specifically for retirement and do not pull money out of that account until retirement.
3. Explore employee retirement or pension plans.
If you haven’t already, talk to your human resources department to learn about any retirement plans your company offers. Many employers will offer to match contributions to a retirement account, such as a 401k or IRA. Be sure you are maxing out those contributions to make the most of your retirement savings.
4. Consider delaying retirement.
Take an honest look at your finances and determine if retiring at your desired retirement age is realistic and in your best interest. This is called your investment time horizon, and an expert financial advisor can help you with your retirement strategy.
Once you’ve done that, evaluate your own financial goals, your discretionary and non-discretionary spending, your net worth, cash flow, debt, and investments to determine the best strategy when it comes to deciding when to retire. You may want to consider delaying your retirement to give yourself some more time to save and contribute to any retirement or pension plans.
Seize the Day to Start Saving for Retirement
When it comes to saving for retirement, it’s never too late to start. These four top ways to save for retirement can help you make the most of your working years and help set you up for retirement success.
An expert financial advisor can help you strategize the best way to make a financial portfolio work for your unique situation. Connect with an advisor to get help with your retirment planning so that you can have financial peace of mind.
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