Tips To Help You Set Up A Retirement Plan In Your 50's

While it's always better to start preparing for retirement at an early age, you're never too old to do it. If you are in your 50's and are just now starting to think about your retirement, there are things you can do to begin this process. Here are a few tips to consider using as you begin to save up for the day you retire.

Pay off debts

If you still currently have any type of debt, pay it off. This includes your house, credit cards, and cars. The goal you should have is to become completely debt-free as quickly as possible because this will help you free up the money you have so you can save more.

If you need help determining how to pay off your debt, contact a financial planner. He or she could examine your budget and your debts and could help you develop a plan to get everything paid off.

Save 20% of your salary

Once you get everything paid off, you should plan on saving at least 20% of the money you make. This means that if you make $1,000 a week, you should immediately save $200 of it. By doing this, you could save over $10,000 a year, and this could really add up.

If you are 50 years old and plan on retiring at the age of 65, you will have 15 years to save money. By saving $10,000 a year, you will be contributing $150,000 into your retirement fund, and this doesn't even include the interest you will make during the 15 years.

Take advantage of your 401k

If your company offers a saving's plan, such as a 401k, you should consider using it to the max. To do this, you will need to find out what the maximum contribution amount is per year, and you should make sure you put this amount in there. The benefit of this is that your employer may also contribute money into the fund each time you do. This will make your retirement savings add up even faster.

Choose investments wisely

Financial planners typically look at the number of years a person has before retirement, and this number helps them determine how much risk they can assume. If you have 50 years until you retire, you can assume more risk on your investments.

If you are already 50 years old and have only 15 years left until retirement, a financial planner is more likely to look into investments that are relatively conservative. This is because you do not have time to risk losing any of your money, which is why conservative investments are better for older people.

If you really want to make sure you have enough money to retire, make an appointment with a financial planner like one from Duff & Associates. By doing this, you will have an expert helping you set up the right steps to achieve your goal.