Is My Retirement Savings Plan on Track?

You need money in retirement.

Money is an important part of life.

You need it to buy food and a pay bills and, well, just about everything.

Did I note that there really is no "free" lunch?

And this need does not disappear in retirement.

Unfortunately, too many Americans save as though it does.

According to a recent CNBC article titled “These people are on the verge of retiring — and they have nothing saved,” 48 percent of American households over age 55 do not have anything saved for retirement.

Yikes!

These individuals are taking a pretty big risk.

Do not follow their lead.

Start preparing financially for retirement.

How?

Catch up on retirement plan contributions.

If your employer has a 401k plan, you can defer up to $19,000.

You can save $6,000 more in a 401k if you are over age 50.

IRA contribution limits are set at $6,000.

If you are over age 50, you can save an additional $1,000.

Have you delayed saving for retirement?

Take full advantage of these provisions to help you catch up on your saving.

Increase the funds in your health savings account.

Your HSA is a useful tool for many reasons.

First, the money you contribute is tax deductible or pretax.

Second, the money you contribute can accumulate tax-free.

Finally, the withdrawals are tax-free on qualified medical expenses.

Singles can contribute $3,500 a year.

Families can save $7,000.

If you are at least age 55, you can contribute an extra $1,000.

There is a caveat.

You cannot contribute when you are enrolled in Medicare.

Work a little longer.

If you are far behind in your retirement planning, delayed retirement or a part-time job could be a viable option for you.

Earmark your raise.

Did you get a raise?

If yes, you already know how to live on a tighter income.

Save at least two-thirds of it.

If your employer has a 401k plan, be sure to increase your deferrals there as well.

It is never too early to save for retirement.

If you are behind, take steps now to set aside money for retirement with the time you have left.

Reference: CNBC (April 5, 2019) “These people are on the verge of retiring — and they have nothing saved”