It’s never too late to plan for retirement

If you’re in your 50’s and haven’t yet started to plan for your retirement, do not panic. But do start to take action now. Even for late-starters with nothing put away, there are viable retirement options. Follow these steps to ensure that you still can live comfortably when retirement comes.
1. Assess the present
List out your assets, liabilities, income, and expenses to come up with a net worth. Determine what assets you have available now for a future retirement.
2. Save 10%
Figure out a way to free up and put away 10% of your gross monthly income into some type of savings account. This could also include paying down high-interest credit card debt.
3. Take advantage of tax breaks
Put the most you can afford into tax-deferred accounts. This includes a 401(k) offered through your employer or an Individual Retirement Account (IRA). You will save the income tax this year for everything you put towards these accounts.
4. Play it safe
At this point in the game, you don’t want to gamble on high-risk investments to try to make up for lost time. Start off by investing in low cost mutual funds that combine stocks and fixed income instruments.
5. Not too late to compound
Even though you’re not in your 20’s or 30’s, you hope to live a long time after your retirement, and you can still see some of your investments compound their returns after 20 years.
6. Pensions and Social Security
Add up what you will get from any traditional pensions and Social Security. This total will reduce what you have to provide for yourself. Check to see if you have any pensions from former employers. Check www.socialsecurity.gov to get an estimate of benefits. Remember, the longer you wait to claim them, the more you will receive.
7. Find places to cut spending
This can include little things like eating out less or traveling less to big things like downsizing your residence or moving to a cheaper part of the country.
8. Extend income
At this point, any extra years you can continue working, reduces the amount of assets you’ll need to accumulate. Additionally, are there opportunities for a side job? This extra income is a great way to generate and/or increase retirement savings.
If you find yourself behind in the retirement game, do not give up. Instead, take action. There is still time. If you’d like to discuss your retirement options further, please contact me at favalli@oaktree securities.net or (831) 801-4069.