It can happen to the best of us. Maybe you’ve had plans to start saving for retirement for years, but those years have a pesky way of catching up and accumulating before you know it. In fact, only 60% of Americans admit that they’ve been able to save enough to retire, and that number keeps falling.
If you’re reading this, you’re probably curious about whether it’s too late to get started. The truth is that it is never too late, but there is no time like the present – even if you’re already in your 50s!
One of the first things you can try is putting your information into a retirement calculator to see where you stand when saving for retirement. They will calculate how much money you could save each week, your age and your investment risk preference. It will then let you know how much money you might have by the time you’ve reached the age of retirement. The results might shock you!
If you work for an employer that offers a matching contribution to your 401(k) plan, you should really take advantage of this. The best thing you can do is to take full advantage of whatever match your employer offers if at all possible. In other words, if they match 6%, try your best to meet 6%. This is free money!
Believe it or not, there might be a few hidden fees tucked into your retirement nest egg – so it isn’t a bad idea to use an app that can help sniff out those fees for you. Some apps such as Bloom can help monitor your 401(k) to make sure you aren’t overpaying on anything and that you have the correct amount invested in stocks instead of bonds.
Take note of what you typically spend each month and write it all down. It is important to be honest with yourself and circle those items that you could really do without. It is ok to keep some items, but the important thing is to cut out those that you don’t need. You’ll thank yourself later.
One of the easiest ways to accumulate more savings is to simply add another revenue to help gain those savings. If you have the time for a part-time job, such as driving for a company like Uber or renting out a spare room via AirBnb – take advantage of this. It might even help you meet new friends along the way.
It is also a fantastic time to start a new hobby if you have the talent to create something that others might be willing to buy.
People often invest more in bonds than stocks when their 401(k) is involved. It does make sense, considering that stocks have a chance to suddenly drop in value, while bonds are far safer. The thing is, stocks have a much higher return. The average annual return for cash is 3% vs 6% for bonds and 10% for stocks.
If you’re in your 50’s, it is advisable to take the risk and invest in stocks. The key is to not go crazy with it since that risk of loss is still there – you just need to find a way to balance it all out.
If possible, it is a great idea to sit down with a financial adviser so they can help you get a solid plan in place, and to make sure you’re making the right decisions. It’s surprising how one little thing can make such a big impact when you’ve reached the end of the road – so it is better to make sure you’re completely fueled up when you first set out.
By doing this your nest egg will start to grow in no time! Just don’t be tempted to go spending it all in one place when you start seeing real results.