Not every American has planned for retirement since their twenties, which causes many workers to play catch-up down the road. Numerous retirement plan services advisors would not recommend workers to start late in their savings efforts. However, there are ways to catch up and still have a good nest egg for the future. Late-bloomers have their work cut out for them to save extra money, but they can catch up on retirement savings.
Here are five tips to help people catch-up on their retirement savings:
Use Automatic Deductions at Work
Workers that have employer-sponsored retirement plans can easily set up automatic deductions from their paychecks. According to US News, auto deductions are perfect for late-starters because the money removed from a worker’s paycheck is not seen on take-home pay. It reduces the temptation to spend it. It will not take long to get used to the adjustment, and eventually, workers will not even notice it.
Spend More on Contributions
It’s pretty simple – the more a worker contributes to their retirement, the more they save. It certainly is not easy, but if workers who start late on their retirement savings want to catch up, they’ll have to give more. According to US News, if workers receives a 5 percent raise, they should give 3 percent toward retirement. These small steps can seriously add up in the long run and help people catch up.
It’s not very uplifting advice, but Americans who need to catch up on their retirement have to continue working past typical retirement ages. According to Market Watch, continuing to work will maximize the total savings and help push money toward the retirement plan in the last few years in the workforce.
Wait on Social Security
Americans are allowed to start seeing Social Security benefits at the age of 62. However, it will pay to wait to take benefits for those who are still working until they reach 70, reported Market Watch. According to Forbes, workers who can delay starting their Social Security benefits until age 70 could boost 80 percent in their monthly payouts. Doing this will maximize the total savings and help push money toward their retirement plan in the last few years.
Keep Updated on Expenses
Workers who watch what they spend on and stay up-to-date on expenses can save more in the long run. According to US News, if workers don’t know what they are spending money on, saving cash will only worsen.
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