How to Catch Up on Saving for Retirement
With retirement nest eggs having endured a pummeling in the past few years, many pre-retirees are wondering what they can do to still ensure they have a retirement in their future. A U.S. News & World Report Money article provides these tips for retirement planning:
Get rid of debt. Compound interest on debt is money that could be socked away for retirement, so paying down debt is essential to growing that nest egg again.
Increase savings. By increasing 401(k) contributions and maxing out your IRA, you can boost your retirement savings and enjoy tax breaks as well. Those over the age of 50 can add an additional $5,000 annually to their 401(k) and $1,000 to an IRA.
Delay retirement. Putting off that retirement date not only helps you save more, it also means you spend less and shorten the number of years that you will need to draw on retirement savings. Just a few years of additional income can make a big difference.
Postpone Social Security benefits. By holding off on taking Social Security benefits, you can get a bigger payout down the road. Delaying benefits until your full entitlement age (between 65 and 67) will increase the size of your monthly checks.
Reduce expenses. Refinancing a mortgage, downsizing into a smaller home, cleaning out your clutter and putting it for sale on eBay or a garage sale, buying a used car instead of new or even eating out less can create more income for you to put toward retirement.
