There are several reasons why you may wish to play catch-up on retirement savings. For example, if you started contributing to a retirement plan later in life, if your contributions to your retirement plan have been low or intermittent, or if they wish to increase the account value of your retirement plan to offset unexpected losses. Regardless of the reason there are several ways you can put your retirement plan on the fast track, here are a few tips to help you get started.
If you are getting a late start or trying to create a significant increase in your savings than it may take more than just cutting out your visits to Starbucks. Depending on your unique situation you may want to cook instead of eating out more, eliminate cable, consider sending the kids to community college for the first two years, get rid of your pricy leased vehicle, sell the boat or downsize to a smaller home, but before you start making rash decisions it’s a good idea to speak with a professional. Make an appointment for a complimentary consultation with a financial advisor who can give you an accurate depiction of your current financial situation and provide ideas for saving that will make the most impact to your retirement.
Get Rid of High Interest Debt
If you are spending money on high interest debts, especially non-deductable debts like credit card debt for example then it may make more sense to pay these off even before you start putting more money into a 401(k), Roth IRA or other investment tool. The reasoning is that it may be difficult to offset the 20% you could already be paying in interest. Eliminating these interest payments will provide you with more money for investing later.
Take Advantage of Investing Tax Breaks
If your company offers a 401(k) plan you may want to take full advantage of the opportunity to make pre-tax contributions because as far as the IRS is concerned the money invested will not count as income earned this year. This means tax savings at the end of the year, especially if you are close to bumping into a higher tax bracket. If your employer is willing to make contributions too, that's even better. If your company doesn’t provide a 401(k) then you may want to open an individual retirement account, a Raymond James financial advisor can help you set one up.
Seek Professional Assistance
Research a few Certified Financial Planners and meet with them to share your circumstances, challenges and goals. Learn how each advisor would work with you to help meet your financial objectives. Evaluate their style, communication skills and ideas and select the one that is the best fit for you. Once you have selected a financial advisor commit yourself to dedicating the time and energy to work with them to create and implement a financial strategy that will meet your financial goals.
Guidance can also be given on ways to reduce expenses, control investment and retirement expenses, diversify investments, and ways in which to flexibly adjust your lifestyle for greater savings ability. To contact Craig Wealth Advisors for a complimentary consultation with financial advisor Debbie Craig, CFP® call 231-331-5500 or click here to send a message.
By Debbie Craig CFP®, MBA, CRPS®
Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.