Worried because you’ve gotten behind on your goals for retirement savings? It’s not too late.
Individuals after the age of 50 are eligible to make extra contributions to some of the most common types of retirement accounts.
Here are some tips to help you catch up—no time machine required.
Try to catch up on contributions to your IRA
Did you know that you can start adding more to your IRA after you turn 50? For both traditional and Roth IRAs, people age 50 and older can contribute up to $7,000—that’s $1,000 more than the maximum contribution prior to that age.
This is a way that the IRS allows you to catch up on saving as you get closer to your retirement date.
Make sure you’ve got the right asset allocation
We get it, you want to make the most money you can in order to make up for lost time. But when it comes to investing for your risk profile, you need to consider your savings. It may not be the best idea for you to go all in one a risky investment on the chance of a quick win if it means jeopardizing your savings.
It’s important to diversify. That means investing in a variety of stocks, bonds, and funds that expose you to numerous sectors, industries, company sizes, even geographies in addition to the U.S.
An investment portfolio with the right balance of stocks and bonds that offer possible fixed returns can be a good strategy to protect your assets while offering the potential for growth.
Consider working a little longer
Not all of us want to think about working longer. But when it comes to investing, another two to three years can give your savings more time to compound.
To begin with, you will have additional time to save and earn greater returns on savings you already have. Not to mention the fact that those years working are years that your savings don’t have to last during retirement.
An additional benefit to delaying retirement is receiving more in monthly Social Security benefits.
Here’s something else to think about: While you can’t contribute to traditional IRA after age 70 ½, you can keep making contributions to a Roth after you’ve reached that age, and you’re not required to take distributions from the account for as long as you live, according to the IRS. That means your savings can really add up.
Want to start saving for your retirement?
With Stash Retire, you can start planning your retirement right now. With as little as $5, you can create a balanced portfolio with an IRA or Roth IRA.
We can help you make catch-up contributions and more.