When you get close to retirement and you realize that you are not going to be able to meet the goals that you had in mind, it can be extremely discouraging. However, when you are late in the game, it doesn’t mean that you can’t catch up. Here are a few of the best things that you can do when you can’t meet your monetary retirement goals.
1. Fix Your Credit
If your credit is messed up, you’ll end up paying a lot more in interest charges and fees than you should. You’ll even pay more for your insurance premiums if your credit is bad. Going into retirement with bad credit is a big red flag that you shouldn’t overlook so do your best to see that you take care of it.
2. Max Out Your Contributions
If you have a qualified retirement accounts such as a 401(k) or an IRA, you need to max out your contribution to it every year. Look over your monthly expenses and see if there’s anything you can do without to increase your retirement contributions. Every retirement account has a maximum amount that you can contribute each year. If you’re not maxing it out, you’re not giving yourself the best chance to be able to retire comfortably. If you have a 401(k), your employer may also make matching contributions based on how much you contribute, so you could be leaving money on the table.
3. Open a Roth IRA
The Roth IRA is another type of retirement account that you may want to open and fund. With this type of IRA, you put money in after you’ve already had taxes taken out. Then when you retire, you do not have to pay taxes on any of the money that you’ve earned. This can be funded in addition to another retirement account that you have, such as a 401(k).
4. Look at Home Equity
If you are a homeowner, the equity that you have in your house could be a substantial source of funds for you during retirement. You could tap into this money using a home-equity loan or a reverse mortgage. While you do not want to use a pure equity to quickly and be left with a big loan payment, it’s nice to know that it is there when you need it.
Don’t get discouraged if you are a little bit behind in the game of saving for retirement. Just keep your head up and get started as soon as you can. You may still reach the finish line sooner than you think.
Retirement Resources:
- The Retirement Savings Time Bomb . . . and How to Defuse It: A Five-Step Action Plan for Protecting Your IRAs, 401(k)s, and Other Retirement Plans from Near Annihilation by the Taxman
- How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won’t Get from Your Financial Advisor
- The Joy of Not Working: A Book for the Retired, Unemployed and Overworked- 21st Century Edition
- The AARP® Retirement Survival Guide: How to Make Smart Financial Decisions in Good Times and Bad
- What Color Is Your Parachute? for Retirement, Second Edition: Planning a Prosperous, Healthy, and Happy Future (What Color Is Your Parachute? for Retirement: Planning Now for the)
- How to Retire the Cheapskate Way: The Ultimate Cheapskate’s Guide to a Better, Earlier, Happier Retirement