Whether you’re just entering the workforce or planning to stop working in a few years, it’s never too early—or too late—to save for retirement.
It’s ideal for retirement planning and saving to begin as soon as you receive your first paycheck, but it’s easy to focus on more pressing expenses in your 20s, 30s, and 40s, like paying for a house or raising children. However, by the time you turn 50 or 60, you may feel like you haven’t saved enough to avoid worries about your financial security in retirement.
There is always time to make changes. Consider these options to protect your assets, build credit, and maintain and grow your investments for a future without financial worries.
Start with the basics
Regardless of your age or current financial situation, the following steps are the foundation of most retirement plans.
- Start with a 401(k). If available, join your employer’s retirement plan, such as a 401(k). You can set up automatic deposits each pay period, and many employers will match your financial contributions, giving you more funds for the future.
- Consider opening an individual retirement account (IRA). Find out if you qualify for an individual retirement account (IRA) and contribute whatever you can afford. You can have an IRA in addition to a plan with your employer.
- Put your money to work. A general investment account has the potential to grow your savings even more.
Catch up on your savings
Understanding your current financial situation and planning for benefits, such as Social Security and pensions, are important steps in determining how much income you could have in retirement. If you are close to your planned retirement date and don’t think you have enough savings to maintain your current or desired lifestyle, here are some considerations that will help put you in a better position.
- Make additional contributions or “catch-up”. Many tax-advantaged retirement savings accounts, such as IRAs and 401(k) plans, allow “catch-up” contributions for people age 50 or older. That means you can contribute more than the maximum set by the government each year, up to a certain amount, to make up for what you didn’t contribute in the past.
- Make sure you have adequate insurance. In addition to making sure your life insurance is up to date, explore long-term care and disability insurance before you retire to save money on future healthcare costs.
- Consider your home equity as part of the equation. If you plan to stay in your home, a home equity line of credit could be another option for financing certain expenses in retirement. If you decide to move to a smaller home, you may be able to free up cash from your home equity for your use.
- Take advantage of other sources of income and capital. Do you have taxable brokerage accounts or other general savings? Include these funding sources, if you have them, when you project how much you will have in retirement.
- Continue working. More and more people are working in semi-retirement status, and developing portfolios that produce passive income. Some might continue working full-time for longer than planned to generate more savings. If you can generate enough income and can wait until age 70 to claim Social Security, this can allow you to maximize benefits throughout your life.
Make a plan
Regardless of your current financial situation, spend some time reviewing your options. There are many useful tools, including articles, calculators, and financial advice from professionals, to help you create a roadmap for the transition to your retirement years.
Planning for your particular situation can help you get closer to the goal you want to reach in retirement, even if you feel like you’re still far from it.
For more information and online retirement articles, tools and calculators, visit www.chase.com/retirement.
Content sponsored by JPMorgan Chase & Co.
