Catch up on retirement savings
You may be wondering if you’re saving enough, how much others are saving, and how much you’ll really need. After talking it over with a pro, you might find that — like many people — you're behind in your retirement savings. Here are some tips to catch up.
1. Max out your workplace plan
Quickly build your retirement savings by putting as much money as you're allowed into your plan. Once you hit 50, you're eligible to make catch-up contributions, increasing the annual amount you can save in your plan to $24,000. This allows you to save more of your income today for retirement. Use our Small Changes Calculator to see how much more you can save by cutting back on everyday splurges.
2. Look for opportunities to save beyond the plan
If you haven't already, think about opening an IRA for yourself or your spouse. Even nonworking spouses can have IRAs. You can set up automatic contributions to an IRA through your checking account.
3. Pay off debt
Pay off credit card debt while you’re still employed, and you'll need that much less income in retirement. As always, remember to start by paying off your highest interest debt first. Many retirees end up with mortgages these days. You’ll need to determine if paying off your mortgage prior to retirement is a possibility, and understand how this impacts your tax situation.
4. Plan to work longer
One of the best ways to strengthen your retirement savings plan is to work longer. Even one extra year can make a big difference if you make the most of tax-advantaged savings opportunities.