It can be quite easy to have your retirement savings strategy derailed. Life happens, after all. If you’re not saving as planned, it’s time to reset and refocus. As USA Today notes, the average retired couple can expect about $35,000 annually from Social Security. In other words? You’re going to need that extra savings. Here are some ways to get your retirement savings back on track.
Revise Your Budget
The first thing to do when looking to kickstart your savings strategy is to revisit your budget. Look for ways to cut back on expenses. If you’re hampered by debt with high interest rates, look into your options for paying it down more effectively. Funnel the freed up cash into your retirement savings.
If you have a retirement plan and are 50 years or older, you can make catch-up contributions. If you have a 401(k), you can stash away an extra $6,500 per year. If you have a traditional IRA or a Roth IRA, you can save an extra $7,000 per year (as long as you don’t make more than $124,000 in adjusted gross income). Those extra savings will reap you big rewards.
The closer you are to retirement the less you want to risk in the stock market. If there’s a crash, you might not have time to recover. If you’re in your 50s, you likely want to focus more on bonds and dividend-paying stocks. On the flip side, the farther you are from retirement, the more risk you can take on. That doesn’t mean making lots of moves. It means building a portfolio of slightly volatile stocks that will hopefully earn big over the long haul.