45+ and Have NOTHING Saved for Retirement?
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
The other day, I was catching up with an old
friend and I realized we'd been friends for 27 years. I never thought I would have a
friendship that long, but that's how life works. The older you get the faster time seems
to fly by. And when retirement is looming, well, boy, does it start to speed up! So, if
you haven't started saving for retirement, don't panic. It is possible to start saving
when you're 45, 50, even 60, and still be able to retire, but you have to treat it like
the house is burning down. So pay attention. I'm Britt Baker, co-founder of Dow Janes, and today I'm giving you seven steps
to catch up on saving for retirement. First step is to get real about your
current situation. How much have you saved for retirement so far? How much will you
get from Social Security? Plug those numbers into a retirement calculator to see how much more
you need to save each month to be able to retire.
The next step is to start saving dramatically.
If you're 50 and you haven't saved anything for retirement, and you wanna be able to retire,
you need to start saving and investing 50% of your income each month, which means that
you're probably gonna either need to reduce your cost of living or increase your income.
If neither of those options are possible, you need to get real about your alternative,
which we'll talk about later in this video. Okay. Third step is to pay off any high-interest
rate debt that you have and build an emergency fund. You wanna do these two things before you
actually start saving for retirement.
The reason for this is that the high-interest rate debt is
costing you more than you're gonna make by having your money invested or even sitting — definitely
sitting — in a savings account, so if you try to start saving for retirement
before you pay off your debt, it's a bad idea. So if you have any savings
sitting around in a savings account, use it to pay off your high-interest rate debt
ASAP. Then you'll wanna build up an emergency fund. But note, if you have a backup plan,
this emergency fund, doesn't have to be huge. You wanna start saving for retirement as soon
as possible, so don't let this step hold you back if you have family or your children who
will support you in case of an emergency. Four is max out your contributions. So, at this
point, saving for retirement should be your number one priority. So you wanna contribute as much as
you can to your retirement accounts. If you have an employer-sponsored retirement account, like
a 401(k )or a 403(b) and your company offers matching contributions, you wanna make sure that
you're contributing as much as your employer will match.
This is free money, so take full advantage
of it. If you don't already have an IRA, set one up and max out those contributions as well. And if
you're self-employed open a solo 401(k) or SEP IRA and max out those contributions too. If you're
getting the theme, the idea is maxing out your contributions. All of these ways that I'm talking
about also allow you to lower your tax rate, so it's especially helpful.
The final way to do
it is if you have a high-deductible health plan, you can open an HSA and max that out too.
Basically, you wanna save as much money as you can in your various tax-advantaged accounts. And
know that if you're 50 or over, you're allowed to contribute a bit more than the standard maximum.
So look up the maximum amount and contribute that. Fifth step is to invest your savings.
So, even though you're starting late, it's not too late to start investing.
I hear this a lot — is it too late for me? Is it too late to start
investing? But it's absolutely not. One thing that's really helpful to remember
is that you don't have to take all of your retirement money out when you turn 67, if that's
the age that you choose to retire. As soon as you choose to retire, you only need to take out enough
to live on each year, really, even each month, so that you still can let the rest of the money stay
invested in your accounts so that they will grow for as long as they can, which you know, could
end up being another 30 years after retirement.
Next is to plan for your realistic retirement.
So once you've done the exercises in step one to figure out the actual situation you're in,
find out if you're going to have to work longer than you planned, you might need to be making
income for longer than you expected and just know that. The sooner you know that, the more you
can prepare for it. The next thing to consider is will you have to move somewhere with a lower
cost of living? This might be why some people choose to retire in Mexico.
Cost of living
is really expensive in the United States, especially in some cities. So if it's gonna make
your retirement a lot easier and a lot happier, consider a change in lifestyle.
Speaking of changing lifestyle, you might also have to downgrade what you are
used to to be able to afford to stop working. So consider the trade-offs. Would you rather work and keep up your lifestyle
or would you rather retire spend time with your grandkids and maybe not
go on the lavish vacations that you're used to? Whether you wanna travel or take art classes
or spend time with family, you wanna be able to enjoy your retirement without stress.
If you
want some extra support on your journey towards saving money so you can actually retire, check
out our free class, Think Like an Investor. I'll put the link in the description below, and
remember it's never too late to start. So, even though you're getting a late start, it's
okay. There's absolutely hope. You have time. Just make sure you start saving, re-watch this
video, and remember the steps that you're supposed to do things in, and if you want some extra
support, feel free to join our member community, The Million Dollar Year.
We support tons of women
as they are just starting to save retirement in their forties and fifties, so we've
got you if you want the extra help..
