If you feel like you’re falling behind on retirement savings, you’re not alone. According to a recent survey, nearly half of Americans age 45 to 65 feel they are behind on saving for retirement and worry they are too far behind to reach their goals. The vast majority (98%) said they wish there was a way to accumulate funds faster to make up for lost time.*
Dealing with financial setbacks can be a major drain on your ability to save for the future. But it’s never too late to turn things around. Here’s a look at some common retirement savings deflators and ways to bounce back on track if one has happened or could happen to you.
Waiting to Get Started
Unfortunately, “good things come to those who wait” typically does not apply to those who put off retirement saving for “later.” The younger you are, the more time you have for compounding earnings to work to your advantage.
Bounce back: If you’ve had a gap in your retirement savings, now is the time to get back in the game. Contribute to a retirement plan offered through your employer, if offered, or open an individual retirement account (IRA).
Not Saving Enough
You don’t want to miss the opportunity to keep your retirement savings growing. That’s why it’s important to save regularly and increase the amount you save over time.
Bounce back: Stay on track by setting up automatic contributions to your retirement plan. If you’re over age 50, you may be able to make additional catch-up contributions to your retirement plan or IRA.
Leaving the Workforce
Losing a job or leaving the workforce can put a halt to your retirement savings. If you’re strapped for cash, you may find yourself needing to borrow from your retirement funds to cover basic living expenses.
Bounce back: Having an emergency fund of six months’ worth of living expenses can help you stay afloat and resist the urge to dip into your retirement account. If you are nearing retirement age, waiting to retire and delaying Social Security benefits until full retirement age or older (up to age 70) can give you more income.
If you’re concerned you could be doing more to save for retirement or would like guidance to bounce back from a derailing event, a PeoplesWealth Advisor can meet with you and help you create a plan to move forward. Contact us to schedule an appointment.
* Source: Allianz Life’s Chasing Retirement Study 2018