Congratulations! If you just turned 50, you’re in the final stretch toward retirement.
With today’s longer life expectancies, you may spend thirty years or even more in retirement living off of your savings.
So don’t rest on your laurels just yet. Take advantage of the next decade or so before you retire to build up some extra reserves for the future.
For a recent article in City & Shore magazine, financial writer Robyn A. Friedman talked to Mari Adam about ways people can continue to build wealth even as retirement looms.
One great way, Mari told Robyn, is to increase funding to your workplace 401(k) or other retirement savings accounts to take advantage of the over-50 catch-up rules. Starting with the year you turn age 50, you can put an extra $6,500 into your 401(k) each year, for a grand total of $26,000 annually. Mari suggests trying to save at least 10 to 15 percent of your income each year.
Another tip? Don’t be overly conservative by keeping too much of your assets in cash or low-return (but safer) investments. “To cover three decades or more in retirement, as well as future inflation, 50- and 60-year-olds need to keep that nest egg growing,” Mari said. “Work out a disciplined plan to get started, using techniques like dollar cost averaging to get yourself off the bench and into the game.”
For more pointers, check out Robyn’s City & Shore article here.