GOLDEN VALLEY, Minn. - There is no shortage of financial demands running a household and sending kids to college. As a result, it may not be a surprise people in their 50s often come to the realization that they have not saved enough for their retirement. But don't panic, there is still time to make a difference for your financial future.
Dan Ament, Financial Advisor with Morgan Stanley joined KARE 11 Sunrise to talk about how you can catch up on your savings.
Take advantage of your retirement plan and 'catch up' provisions.
The 2014 contribution limits will remain the same as they are for 2013. You can contribute as much as $17,500 to a 401(k), 403(b), 457 or the federal government's Thrift Savings Plan, plus as much as $5,500 more in catch-up contributions if you're 50 or older in 2014. And the annual contribution limit for traditional and Roth IRAs remains at $5,500 in 2014, plus as much as $1,000 more if you're 50 or older. Remember to review eligibility for contributing to an IRA or Roth IRA.
Tighten up your investments.
Many people invest whenever they get a hot tip from a trusted source. They might pick up a mutual fund here, a hot stock there and end up holding a variety of uncoordinated investment holdings that are not being monitored. Take the time to develop an investment plan pulling together your big picture to better understand exactly how your investment allocation stacks up and what changes may be appropriate to consider.
Keep up in your profession.
The biggest threat to your retirement savings is not having a paycheck and being able to save some of it consistently. Work hard, be open-minded and strive to outperform your peers. Seek training opportunities or continuing education to enhance your value.
Start tracking your finances.
Get a good picture of where your money is going, so you can selectively reduce consumption in areas that don't matter much to you. Once you figure out how much you spend on a regular basis, estimate how much you'll need in retirement and start plotting a way towards plugging the hole.
Consider downsizing your lifestyle.
No retirement plan can ever work if you always spend everything you make. Imagining a lifestyle spending less can be difficult, but the funny thing is that no matter your spending level, there are many others spending much less while living a fulfilled and happy life. Stop seeing spending money as a solution for every little problem in your life, and you'll be spending less in no time. Take out your budget, cut out anything that isn't contributing to your level of happiness and bank the rest. You'll amass a solid nest egg in no time.
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