Finance is Fun: It’s Not Too Late!

Updated 6 months ago

Recently Marion has had folks in their fifties saying, What’s the point. I didn’t know how to handle money in my youth and now it’s too late for a good retirement.
 
It’s never too late to make life better. Here are some ideas.
 
Estimate the goal – By some estimates a four percent withdrawal rate is the amount one should take out of their nest egg annually to have a good chance of not outliving their savings. So if you’ve saved a million dollars, you would take forty thousand dollars per year for living.  Because you may live a very long time, we need to make sure you have money for your entire life. You don’t want to outlive your money.
 
Plan a strategy – The problem with starting late is the help that compound interest provides for those with many years until retirement. Compound interest, as you may remember, is when interest accumulates on both the principal and interest payments. It is a benefit to those with many years to save.  You may have less time. So you need to save much more seriously, with a more significant portion of your income used wisely. And ‘used wisely’ is the key. The tax code allows for ‘catch up’ provisions which permit more significant contributions to pretax accounts after the age of fifty. Postponing retirement may also help as the few extra working years may be just what you need to be in an even better position.
 
Know the vehicles – Do you have a 401(k) or other retirement plans at work? It doesn’t matter if there is a match or not. These accounts are better when the firm makes additional contributions for you, but it’s time for you to make significant deposits into these kind of accounts and many corporate retirement plans allow for higher contributions. SIMPLE IRAs, 403(b)s, all have various rules and contribution limits. You may also be able to take advantage of individual retirement accounts to add to your savings.
 
Kick debt – If you owe on many kinds of debt your funds in retirement will be spent on paying for your past and not giving you the activities and travel that you dream of. Make savings a priority along with debt repayment. And don’t accumulate new debt, bud!
 
Let the worry drive you – Don’t let discouragement steer you off into despair and inaction. Let the worry about starting late drive you to save and pay off debt- and not accumulate more- so you can have that better future. Do not give up! Don’t ever give up.
 
And don’t lose one more moment not taking control of your beautiful future.
 
 
 
Citations:
http://financialplan.about.com/od/retirementplanning/a/LateStartRetire.htm
http://www.forbes.com/2010/03/16/retirement-planning-401k-ira-personal-finance-late-start.html

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