Haunted by a Late Start on Retirement Saving? Expert Advice to Help You Catch Up

Haunted by a Late Start on Retirement Saving? Expert Advice to Help You Catch Up

This time of year, scary stories abound. Ghosts come out of the woodwork. Vampires lurk in the shadows. Things go bump in the night.

Of course, if you’re behind on your retirement savings, spooky specters don’t hold a candle to what lies ahead. It’s enough to send a chill up your spine and back again. But your future doesn’t have to be frightening!

We asked a few of Dave’s investing Endorsed Local Providers (ELPs) to share their late-starter retirement advice. Here’s what they had to say.

Be Intentional

You know how you avoid going to the doctor because you’re afraid of what they might find? Money’s no different. What you don’t know really freaks you out! But if you want to feel good about your future, you’ve got to dive headfirst into the details.

Russell Kizer, an investing ELP located in Birmingham, AL, suggests starting with a budget. Put every dollar on paper on purpose, then look for ways to cut spending and free up more cash for retirement.

It’s okay to take it one step at a time. “Go back and look at what you spent on entertainment in the last three months,” Chadd Hoeft, an investing ELP in Omaha, NE, says. “Can you eat dinner at home a couple of extra nights a month instead of taking the whole family out? Start there and contribute those dollars toward your future.”

Being intentional with your budget requires commitment each month, but it’s well worth the time invested. Why? Because once you know where your money’s going, you can take control of the situation.

Know Your Options

Want to banish your fear of the unknown once and for all? Educate yourself. An experienced advisor can help you understand and navigate all of your options. Here are a few to consider:

–Ask what’s available at work. You may be missing out on a 401(k) match or find “free money” through a pension.

–If you’re 50 or older, you can make additional “catch up” contributions toward retirement: an extra $1,000 per year for traditional or Roth IRAs and an extra $5,500 per year for 401(k), 403(b) and 457 plans.

–Dave recommends pretending that Social Security doesn’t exist so you don’t miss it if it’s gone when you retire. But if Social Security is still around in your golden years, you can maximize your monthly payments by waiting until you’re 70 to draw benefits.

Let’s take a look at how a little education helped one couple make big strides. When they came to Justin Widick, an investing ELP in Omaha, NE, for advice, they were 60 years old with basically just a paid-off home as their retirement savings. By taking advantage of options at work and contributing to a Roth IRA and other nonqualified accounts, the couple pushed their net worth from $100,000 to almost $500,000 over the course of just six years. And they did it all on a normal household income!

“It just goes to show you can make immense progress if you’re determined and intentional about what you want to do,” Justin says.

Add Years to Your Nest Egg

If the fear of failure is getting in the way of their future, we’ve got good news! The clock doesn’t run out the minute you hit 65. Get more bang for your retirement buck with these expert ideas:

–Keep an open mind about housing. If you have way more empty nest—or mortgage—than you need, why not consider downsizing? Letting go of a place that holds so many memories can be difficult, but exploring your options can open up a world of opportunity in your golden years.

–“Walk” into retirement. Want to retire on your terms and still get paid? Try a phased approach by gradually reducing your hours over time or pursuing a job you truly enjoy. It’s a great way to stretch your savings until you’re ready to call it a day (for real this time).

–Contain long-term costs. Everyone knows nursing home costs can put a big dent in your retirement savings. That’s why Dave recommends getting long-term care insurance when you turn 60. It may not be the most glamorous birthday gift you get for the big 6-0, but it could save you over $87,000 a year, according to the Genworth 2014 Cost of Care Survey.