Caribbean Life, S 34 eptember 20-26, 2019 BQ
tips for late starters
Despite countless television ads
touting the virtues of retirement
planning, it seems many
people are not getting the message.
According to a survey from GOBBankingRates.
com, one-third of
Americans have nothing saved for retirement.
The picture is not any rosier
in Canada, where Statistics Canada
reports that just 65.2 percent of
the country’s 14 million households
contributed to a retirement plan in
Financial advisors recommend
men and women begin saving for retirement
as early as possible. The longer
people delay opening a retirement
account, the less time their money
will have to grow. Those who never
open such accounts may not be able to
meet their cost of living in the future.
While it pays to start saving for
retirement early, late bloomers who
need to catch up should know that
it’s never too late to start. Here are
Sign up for an employer-sponsored
retirement account. Many
employers arrange for retirement
savings accounts like a 401(k) for
their employees. Such accounts are
typically tax-deferred. As a result,
men and women likely won’t even
notice the money missing from their
paychecks each month. Take advantage
of such offerings if they exist.
Such opportunities can be even more
benefi cial to late bloomers whose employers
match contributions up to a
Start saving as much as possible.
Many people contribute six
percent of their pay to a retirement
savings account such as a 401(k).
That rule of thumb may be enough
for young workers, but late bloomers
may need to contribute a higher
percentage of their incomes if they
hope to catch up. If 10 percent is doable,
then contribute 10 percent, being
sure to diversify how that 10 percent
is invested. Workers who can
afford to contribute more might want
to explore other retirement account
options so they avoid putting all of
their eggs into one basket.
Avoid high-risk investments.
Investors trying to catch up on retirement
savings may be tempted
to invest their money in high-risk
funds with the hope of making up
ground quickly. But investors typically
want to reduce risk as they get
older. That approach should still govern
late bloomers’ investing decisions,
as high-risk funds that don’t
perform well could leave aging investors
with little to nothing come retirement.
Prospective investors who
need help choosing the right funds
for themselves should contact a fi -
Cut spending. Men and women
getting a late start on retirement saving
should examine their monthly expenses,
looking for places to cut costs
so they can reallocate those funds
for retirement savings. Some ways
to considerably reduce monthly expenses
include cutting the cord with
a cable provider, driving a preowned
vehicle instead of a new model, and
downsizing to a smaller home.
Those who have delayed saving for
retirement should not panic. While
it’s always best to begin saving for
retirement as early as possible, there
are ways for late bloomers to catch up
or create a decent-sized nest egg for
their golden years.