Countdown to retirement: Strategies for saving in your 50s
Many retirees today are redefining the “golden years.”
Forget about endless days of leisure. Retirees seek
adventure, travel, and new business pursuits. While
these changes may redefine retirement, will retirees be
able to finance their plans? Today, many people age
50 and older have not begun to save for retirement or
have yet to accumulate sufficient funds.
If you’re in this age group and find yourself facing an
underfunded retirement, it’s not too late to take charge.
There are actions you can take today to get on the
right track. Here are some ideas:
What’s it going to take? First, estimate how much
money you will need in retirement. Once you have an
idea of the amount, you can work toward meeting that
goal. A good rule of thumb is that you may need 60%–
80% of your current annual income in retirement. Your
financial professional can help you assess the best
amount for your
Maximize your contributions. If your employer offers
a retirement plan, contribute as much as the law will
allow. In 2018, those age 50 and over can contribute
up to $24,500 to an employer-sponsored 401(k) plan
($18,500 + $6,000 “catch-up” contribution). Many
employers also offer a company match, so be sure you
contribute enough to claim this “free” money, which
can add up over time.
Create a spending plan. In other words, make a
budget. Many people think a budget is restrictive, but
look at it this way: You can spend now, or you can
have the money to afford your dream adventures later.
To start, it is important that you pay down debt and
avoid accruing new debt. Next, examine your spending
habits and replace some of your discretionary spending
with saving. Saving even $20 more per week is a
step in the right direction.
Take initiative. Besides contributing to your
employer’s plan, you can save more by opening your
own Roth IRA. Contributions are made after taxes, but
earnings and distributions are income-tax free,
provided the account is at least five years old and you
have reached age 59½. Those age 50 and over can
contribute up to $6,500 a year in 2018. Eligibility in
2018 for these plans begins to phase out with adjusted
gross incomes of $120,000–$135,000 for single filers
and $189,000–$199,000 for married joint filers.
Hang out your shingle. Many Boomers hope to start
their own businesses in retirement. Why wait? If you
begin your entrepreneurial efforts now, your business
has the potential to be in full swing by the time you
retire, and any profits between now and then can be
added to your savings.
Consider downsizing. Your home may have
significantly increased in value since you first bought it,
and you may have already paid off the mortgage. With children at or near adulthood, do you really need all
that space? Selling now and moving to a smaller, more
affordable location may allow you to transfer some of
the equity in your home into a savings vehicle.
Reconsider your retirement age. If you want to
cushion your retirement savings, consider staying on
the job longer. Some people actually leave retirement
to reenter the workforce because they feel more
fulfilled while working. Others seek part-time work,
consulting, or entrepreneurial endeavors. Such options
may enable you to earn more money to save, which
may help to postpone spending down your savings.
Regardless of which options you choose, you can
benefit from time and compounding interest. Every
year that your savings remain untouched allows more
time for growth. It is never too late to start preparing for
your future. So, take action now to get on track to
saving for your retirement.
Important Disclosure Information
The article above was provided to Synovus by eMoney Advisor, LLC, and is used here with permission from eMoney or a third party content provider. eMoney does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. This information was provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
You are about to leave the Synovus web site for a third-party site
Third-party sites aren't under our control, and we are not responsible for any of the content or additional links they contain. We don't endorse to guarantee the goods or information provided by third-party sites, and we're not responsible for any failures or inaccuracies. Third-party sites may contain less security and may have different privacy policies from ours.