Turning 50? Already there? Scared because you haven’t saved a dime (or enough) for retirement yet? Don’t worry. It’s late…but not too late. There are a few things you can do to jump start your retirement savings. But first…relax. Recognize you will never catch up to where you’d be if you started saving in your 20’s or 30’s. Don’t add more pressure than you need.
Then take a deep breath. You’ve got maturity going for you. Just remember, as you start your Investment Venture, choose wisely. A 30 year-old has years to make up for mistakes or downturns in the market. You don’t. Keep that in mind when you’re considering risk.
• Thinking of an IRA? You can sock away as much as $6,500 per year. ($5,500 per year allowed, plus an additional $1,000 per year if you’re age 50 or more.) That may not sound like a heck of a lot, but let me ask you…how much have you saved so far?
• Take advantage of turning 50 with your 401(k)! You get to put more into your retirement plan, with the IRS’ blessing, than the millennials do. In addition to the $18,500 you can defer in your 401(k), for example, you can contribute an additional $6,500. It’s the “catch-up” clause in the retirement code, just for people your age. Who says the IRS doesn’t have a heart?
• Don’t overlook your HSA. If you have a high-deductible HSA (Health Savings Account plan), there’s a “catch-up” contribution built in there, too, just like with your 401(k). Here you have to reach age 55 first, but once you do, that contribution turns on. For 2018, the maximum annual HSA contribution for individuals…will increase from $3,400 to $3,450…$6,900 for family coverage. The 2018 HSA catch-up contribution limit for participants 55 or older on December 31, 2018, stays locked at $1,000.
Finally, the very best advice I can give is: Seek the advice of a qualified financial professional. Just talking over your questions, your concerns, your ideas can bring clarity to an otherwise confusing (and overwhelming) situation. And it’s always nice to have a pro on your side to help you avoid investment pitfalls that can doom a mature saver.
Have questions about your retirement? Let’s have a conversation. Call us today.