While everyone knows that it’s ideal to start saving for retirement as soon as you possibly can, many people either haven’t been able to start saving until they’ve been older or haven’t worried too much about it until the date of their retirement starts visibly coming closer. But although you might not have started saving too much yet, you can begin preparing financially for retirement even well into your 40s and beyond.
To help you in doing this, here are three tips for starting retirement savings in your 40s.
Be Ready To Make Some Tough Decisions
If you know that you’re needing to buckle down and start really contributing a larger portion of your income to your retirement, that likely means that you’re going to be taking away some money from other categories of your budget. While some of these decisions might be easy, others could be really tough for you.
If you always wanted to help put your kids through college or give financial assistance to family members or friends, you may need to cut back on these so that you can contribute a bigger portion of your monthly income toward retirement. So if you’re wanting to be comfortable when you reach retirement, there will likely be some financial pains like this as you work hard to prepare for this.
Get Paid What You’re Worth
Now that you’re in your 40s or older, hopefully you spent your younger years figuring out what you wanted to do for a career and paying your dues so that you are in a more senior-level position.
If this is where you find yourself, you should make sure that you’re getting paid what you’re worth now, especially if you’re trying to make up for lost time in retirement savings. If you haven’t gotten a raise at work in a while, now could be a good time to bring your compensation up to the fair market value. Or, if you don’t think that would work with your current employment, it could be worth finding a new job that will pay you more and potentially contribute more to your retirement funds as well.
Start Maxing Out Your Retirement Contributions
When you only have a few short years to start saving for retirement, you have to make the most of your money. This means maxing out your contributions to all of the retirement funds that you have available to you.
While you might have just contributed enough to get your employer match in the past, now you should be contributing enough to max out your accounts each year. By doing this, and opening more investment vehicles so that you can let your money work for you even more, you should be able to make up for a lot of lost time with retirement savings.
If you’re in your 40s and are ready to get serious about saving for retirement, consider using the tips mentioned above to help you get on track with this.
