(WTNH) — Do you feel like you’ll never be able to retire? Financial Professional Roger Cowen shares his advice.
Create a Plan
- If you don’t want to work in retirement, you have to plan like you won’t.
- Start thinking about what you want to do, from trips to daily expenses, and how much that is going to cost you.
- To quickly check if you are on track in saving for retirement, I have 4 milestones:
- The first milestone is at age 30; you should have your annual salary saved in retirement account, like a 401(k).
- By age 35, you should have double your annual salary saved.
- The milestones keep building on each other – You should have eight times your salary saved by age 60.
- Then your ultimate goal is ten times your annual salary by age 67.
Increase Your Contributions
- One of the best things to do if you are behind on saving for retirement is to increase how much you’re contributing to your retirement accounts.
- The maximum contribution limits have increased in 2019.
- You can now save up to $19,000 in your 401(k) and up to $6,000 in your IRA or Roth IRA.
- If you are 50 or older, you can save an additional $6,000 in your 401(k) and $1,000 in your IRA.
Get Rid of Debt
- The average credit card debt per household is just over $8,400.
- You don’t want to waste money you could be saving for retirement on debt and high interest rates.
- Not all debt is considered bad. A mortgage is considered good because your home is expected to grow in value.
- High interest credit card debt and car loans are considered bad debt because it does not offer a return on your investment.
- Make it a priority to tackle your bad debt using the snowball method: Start by organizing your debts to determine your lowest balance. Make the minimum payment on your other debts and use any extra money to pay off your smallest debt. Then, pay off your next smallest debt.
Talk with a Professional
- If you don’t picture yourself working in retirement, you need to create a plan that will last, and that’s where a financial professional can help.
- There are a lot of moving parts for people in or near retirement: longevity, the markets and Social Security to name a few. You should look for a financial professional who can put together a full financial strategy to help you grow your money and give you the confidence to retire.