Last year marked a big milestone for the millions of Americans who make up Generation X: they turned 50. Generation X is generally considered to consist of Americans born between 1965 and 1980. Today, they range in age from 35 up to 51. Welcome to middle age, Gen X!
Middle age means retirement is rapidly approaching. If you’re nearing 50, now may be the time to take a fresh look at your retirement income strategy, and to determine what changes you might need to make so you can maximize the final years of your career.
Below are a few tips to consider as you enter the home stretch of retirement income planning. If you’ve had trouble saving for retirement in the past, don’t worry. It’s never too late to get started. Implement some of the tips below so you can save more and enter retirement on solid financial footing.
Get serious about a budget.
According to a Gallup study, 68% of Americans don’t have a household budget. Are you a member of that group? If so, now could be the time to create one. A budget can be one of your most powerful financial tools when it comes to saving money and reducing spending.
If you don’t have a budget, it may be hard to determine how much you have available to save. You also may have difficulty knowing whether or not you’re hitting your spending and saving goals.
Preparing a budget doesn’t have to be a challenging undertaking. There are plenty of online programs you can use to quickly create one. You can also speak with your insurance or financial professional, who may be able to help you develop a budget for your household.
Work hard to eliminate debt.
If you’re in your 40s or 50s and struggling with debt, you’re not alone. However, as you approach retirement, the burden of debt can be even more severe because you may have to cover the debt with a fixed income.
Try to tackle high-interest debt like credit cards and other consumer loans before you retire. Without monthly payments to service those debts, you could have more discretionary income to help you reach your retirement income goals.
Also, make an effort to eliminate any lingering student loans. If you have unpaid student loans, the federal government can actually garnish up to 15 percent of your benefits when you start Social Security payments. Make a plan today to eliminate those loans before you retire.
Take a fresh look at your retirement income strategies.
When was the last time you reviewed your allocations for your retirement income plans? If it’s been a while, now might be the time to do so. As you get older, your time horizon shortens, meaning you have less time to recover from serious losses. You may want to adjust your allocation to reduce potential volatility.
That doesn’t mean you should go completely conservative, though. Your retirement could last decades. You will need growth to combat inflation and to support your lifestyle during retirement. Work with your insurance or financial professional to find an allocation that balances risk management with growth opportunities.
Contribute to an HSA.
Fidelity recently calculated a 65-year-old couple retiring in 2016 could expect to spend $245,000 on health care during their retirement. That number is likely to increase before you retire.
The good news is you can start saving for it today, and you can do it in a tax-efficient manner with a health care savings account (HSA). With an HSA, you can contribute pre-tax dollars to the account, grow the money on a tax-deferred basis, and then withdraw it tax-free if the money is used for medical expenses.
The best part? You can roll over your unused balance from year-to-year and even into retirement. That means you can save money on a tax-free basis today and then use it to cover medical bills after you retire.
Ready to get serious about your retirement income planning? Contact your insurance or financial professional today. They can help you devise a strategy to maximize the rest of your working years and prepare for retirement.
This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice
This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency
15430 - 2016/2/29