People over 40 have the misconception that it’s too late for them to start saving for retirement. While having only 15+ years left to save a nest egg seems daunting, there are some accelerated retirement tactics that can help you earn as much money as quickly as possible.

401(K) to the Max – How powerful is a 401(K)? According to an Investopedia article, a 401(k) can provide you with a more savings that you’d expect.  

Consider this:

If you’re 40 years old and donate $17,500 to a 401(k) yearly, with an 8% return (with no employer contribution), you could reap over $1.3 million in savings by age 65. The same person at age 50 can garner nearly $300,000 more with a catch-up amount of $5,500.

If you think you can’t spare fully funding your 401(K) every paycheck, you are doing a disservice to your livelihood come retirement. You get out of it what you put into it.

The Road to Roth IRA – A Roth IRA is similar to a traditional IRA with the potential benefit of being tax-free for qualified distributions. Because of that, Roth IRAs are a great way to increase your retirement savings on a tax-deferred plan. How much can you really sock away with a Roth? Quite a bit!

Consider this:

A 40-year-old who invests $5,500 each year and obtains an annual rate of return of 8% can potentially save over $434,000 by age 65. Even a 50-year old who starts saving $6,500 per year with the same rate of return can save an average of $190,000 by age 65.

Take Advantage of Allowable Deductions – Granted, standard deductions aren’t one size fits all. If you have a large amount of mortgage interest, deductible taxes, business-related expenses that weren’t reimbursed by your company, and/or charitable donations, it probably makes sense to itemize your deductions. However, it’s easy enough to find out through a CPA if this option is right for you. There is no harm in doing your research. Get some help combing over your specific situation to see if it makes sense to itemize. Whether to itemize or not to itemize, make it a habit to keep logs of where, what, how you’re spending. Keep receipts if need be. More than any other retirement advice we can give, know where your money is going so you can save it is a no brainer.

Catch-up using catch-up contributions if you are age 50 or older – If you’re over 50, there is some light at the end of the retirement tunnel, even if you’re late in your retirement planning. At 50, you become eligible to go beyond contribution limits to IRAs and 401(K)s. This is the best news for those desperate to catch-up and haven’t had the opportunity or time to consider their retirement early on.

It should be noted that individuals over 40 who have little to no retirement planning methods in place are at a disadvantage. However, with the proper planning and a willingness to save and invest, the odds are not insurmountable.
If you feel you are not where you want to be in the retirement planning game, don’t lose hope. It’s never too late to set yourself up better for retirement. Find some info, suggestions, and help at Goldstone Financial Group, and be sure to read up on some retirement strategies at Goldstone Financial’s blog HERE.