Retirement Planning Hacks for Late Starters

By in ,
Retirement Planning Hacks for Late Starters

If you are someone who got a late start saving for retirement, you may fear that it is out of reach. But in reality, catching up on your retirement savings may be easier than you think.

Knowing how to plan for retirement if you’re late in the game can be overwhelming. If it’s any consolation, you’re not alone. A report on the economic well-being of U.S. households conducted by The Federal Reserve showed that only 44% of Americans aged 45–59 felt that their retirement savings were on track, leaving 56% feeling behind.

But while your fears at nearing retirement age with very little saved is understandable, your situation isn’t beyond recall. If you’re willing to start taking serious steps now, you still have enough time to significantly improve your retirement prospects. Here are some helpful hacks to get things moving in the right direction.

How do you envision your retirement? Long vacations? Joining that exclusive golf club? Buying that boat you always dreamed of? Or simply getting by contently not having to worry about money? Whatever your retirement dream is, you need to find out how much it will cost.

Start by running a retirement planning calculator to give you a sense of how much money you’ll need to make those goals a reality. This can also give you a realistic idea of how long you’ll need to work, how much you need to save now, and the level of income to expect when you do reach retirement.

While you may presume you don’t need a millions (or that you just want a simple life) this can easily require $1 million in the bank after you quit working. Why? Some say you should withdraw no more than 4% of your retirement portfolio each year during your retirement. (AKA the 4% Rule.) If you do the math, 4% of $1 million is $40,000. Therefore, if you want to live on an income of $40,000 per year in retirement, you’ll need a portfolio of at least $1 million. (Note: This assumes you don’t have a pension, rental properties, or other sources of retirement income. It also excludes Social Security income.)

While the 4% is a simple starting point for planning, developing a more comprehensive approach to fit your individual needs is going to require help. Learn more on the topic here.

There are a lot of strategies to fund your retirement.

Participating in an employer-sponsored plan, such as a 401(k) or 403(b), is one of the easiest ways to save, especially if your company offers matching contributions. If you’re not eligible to participate in plan through your workplace, you can always chip in money to a traditional or Roth IRA.

Ask your trusted retirement income advisor about which of the following retirement investment options are best for your “catch-up” requirements:

  1. Contributing To Your 401K
  2. Opening an IRA Or A Roth IRA
  3. Opening A Health Savings Account
  4. Being Aware Of Retirement Fund Fees
  5. Buying A Fixed Annuity
  6. Utilizing Saver’s Credit
  7. Delaying Social Security Benefit Collection
  8. Preparing For Inflation
  9. Assessing Risk Tolerance
  10. Creating A Withdrawal Strategy

Depending on how far behind you’ve fallen in your retirement planning efforts, you may not realistically be able to save enough or put in enough extra years in your job to make up for lost time. Which means you need to be open to other ways to enhance your retirement security. Including investing…

If you’re late in getting started with saving for retirement, then investing could prove critical. By investing wisely, you have a good chance of making up for lost time. However, you’ll want to tread carefully. Investing involves a juggling act between risk and return. Some retirement investing strategies to help you balance between the two could include:

  1. Creating A Total Return Portfolio
  2. Utilizing Retirement Income Funds
  3. Using Immediate Annuities
  4. Utilizing Variable Annuities
  5. Purchasing Bonds
  6. Keeping Safe Alternatives
  7. Utilizing Closed-End Funds
  8. Exploring Dividends

Overwhelmed by the list? Speak with an experienced financial advisor to help you break down the best options for your individual needs.

To get better results from your investments, you need to learn how to manage risk successfully. Why? Because no matter the investments you choose (high risk or low risk), there is an element of risk that will always surround your investments. But the good news is that you can reduce and curtail this risk with some strategies: Diversification, risk mitigation, keeping a balance between savings, investments, and spending are critical components of any financial plan. Start by asking yourself these questions:

  • Does my portfolio mix still match my risk tolerance?
  • Does my risk tolerance still match my goals?

The answers could lie in the guidance of a financial advisor. A financial advisor can help you determine how to maximize your retirement savings as you play catch up.

At CKS Summit Group, we design plans which are specifically structured to limit downside stock market risk. We design, build, and manage custom retirement portfolios that are fully capable of simultaneously generating stable growth, increasing income, and preservation of principal throughout a client’s lifetime, with only limited downside market risk. This allows us to protect our client’s assets while providing them with strategies for achieving effective tax reduction and inflation protection.

Because certain financial vehicles are good at some things and poor at others no single product can achieve all of the important objectives that most retirees have. Through the correct blending of vehicles together, multiple objectives can be met at the same time.

To go from saving little to saving diligently is going to require real discipline and some major lifestyle adjustments.

If you’re late to the retirement savings game, don’t panic. At CKS Summit Group, all of our financial advisors possess the knowledge and experience necessary to best handle your retirement income planning needs at any stage of life. We will work directly with you to determine which investment opportunities bring the biggest benefit to you and your retirement.

To contact a CKS retirement planning professional and schedule your personal strategy session, please give us a call at 586-286-5820 or click here.

Thank you, and we look forward to solving your retirement income challenges soon!