I Can't Believe I Forgot To Save For My Retirement!
By Ginita Wall, CPA, CFP

Most people in their twenties and thirties have other things on their minds than retirement.

But as we get older, we suddenly realize we have to save for retirement! If you've procrastinated in planning for retirement, you may not be as far behind as you think.

Perhaps your employment benefits include a defined benefit retirement plan that will provide you a monthly benefit when you retire. You may also have saved some money in salary deferral plans, such as 401(k)s, 403(b)s, TSAs or in IRAs. Social Security benefits may also provide retirement income.

And don't forget about your home mortgage. By retirement you may have paid it off or have enough equity to move somewhere less expensive and reduce your payments. Add to all of this any inheritance you expect from your parents or others, and you are at least part way to a comfortable retirement.

Making Up for Lost Time

For the rest of your retirement needs, here are eight things you can do to catch up.

1. Pay off credit cards as soon as you can. The interest you pay on credit cards reduces the amount you have available to save for retirement. Use income tax returns to pay down credit cards and get rid of expensive monthly interest.
   
   
2. Scale down rather than up. To build a retirement nest egg, scale down your lifestyle and get used to living on less. When you get a raise, sock it away for retirement.
   
   
3. Put as much as you can into retirement plans. The money will grow faster, since you don't pay tax on it currently. And the money is taken directly from your paycheck, so you never see it.
   
   
4. Boost your income. Find a better job with enhanced benefits. Or take on a second job, stashing that money for retirement. The sacrifices you make now will affect the quality of your life later on.
   
   
5. Postpone your retirement. Find ways to make your employment more enjoyable, so you don't mind working even during retirement. Stay in your present job beyond normal retirement age, or find a job you can do when your present employment ends.
   
   
6. Go for growth. You need to make your money grow faster, so get it out of the bank and invest in growth stocks mutual funds. If you have ten years or more to retirement, you can afford the greater volatility risk of the stock market.
   
   
7. Add to your investments each month. Sophie Tucker, the famous singer, said the secret to longevity is to keep breathing; similarly, the secret to financial success is to keep investing.
   
   
8. Rely on professional advice. Just as some dieters do better in a diet program than on their own, many investors do better when they have a professional guiding them.

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