It is important to remember that just because retirement is around the corner and the financial forecast appears bleak, doesn’t mean it has to be. There are still ways to ensure that the golden years are as enjoyable as they are meant to be.
Assess Personal Finances Objectively
One of the advantages of being this close to retirement is that it is easier to predict what expenses will be like and what sort of income can be expected. Many people that plan for retirement long in advance end up with estimates that are way off the mark because they are simply guessing at a very uncertain future that is sometimes decades away. People that use their proximity to the target can often hit the nail on the head and set financial goals that are both realistic and attainable by using the figures available them from current income and expenses and of course making adjustments where necessary.
Determine if Financial Retirement Targets Can Be Met
After developing a retirement plan using the best information available, it is still necessary to judge if the targets set can be achieved and if so, what actions need to be taken to ensure they are realized. It might be necessary to ramp up savings or to make certain lifestyle changes in order to meet some of the stipulations set out in the plan.
Take Advantage of Tax Benefits and Concessions for Those Over 50
While it is not possible to simply save and rely on the magic of compound interest to provide a comfortable retirement nest egg, those in their 50s and 60s still have options. The government allows those 50 and over to contribute an additional $6000 annually in a regular or Roth IRA. Those 50 and over who save in a 401K plan can also contribute an extra $5000 a year when compared to younger folk.
Those Nearing Retirement Can Consider Working a Bit Longer
While the original plan might have been to retire at 55 working for a little longer can help in two ways. Firstly, it delays making withdrawals on the accumulated retirement savings giving them extra time to grow. Secondly, working longer means getting paid longer; which translates to making additions to the retirement account that can significantly affect the bottom line. Even choosing to work part time can help to boost retirement accounts while giving those hankering for retirement a taste of the freedom that is to come.
Natalia Jones - Natalia Jones is a full time freelance writer. She has an Advanced Diploma in Financial Management (ACCA) and she has previously worked in ...
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