St. Louis Advisor Don Chamberlin of The Chamberlin Group is celebratingNational Save for Retirement Week with tips for Baby Boomers. A national effort to raise public awareness about the importance of saving for retirement, National Save for Retirement Week is October 18-24. Held every year during the third week of October, National Save for Retirement Week has been recognized by congress since 2006 in an effort to help American workers get their personal retirement goals on track.
“Planning for your own retirement is extremely important, especially today as people are living longer than ever. A good plan can help ensure that you do not outlive your savings. Unfortunately, many do not take the time to plan and could come up financially short in retirement or may not even be able to retire at all,” says Chamberlin.
According to the 2010 U.S. Census Bureau, Baby Boomers make up roughly 25 percent of St. Louis’ total population. This generation, the closest to the retirement finish line, should determine what they want their retirement to look like, what their spending needs will be, when retirement will start and how much it will cost. Here are Chamberlin’s retirement planning tips for Baby Boomers:
- Go through your expenses. After receiving a steady paycheck for years, it can be difficult adjusting to a fixed income. To help transition and see where you are, track your spending for a full 12 months to develop an accurate monthly estimate that includes holiday spending, annual taxes, and vacations.
- Look through your papers. Over the years, you may have acquired some old 401(k)s, IRAs, brokerage accounts, old life insurance policies, etc. Having investments strewn throughout can lead to fee-inefficiencies and ineffective management, not to mention a messy estate for your loved ones to inherit. Streamlining and developing a comprehensive plan can ensure your investments are working cohesively toward your goals.
- Review your risk. With your retirement goal within reach, work to review your current risk tolerance and investments to be sure they are on target for your expectations. A significant loss at this critical stage in your planning could add a few years to your work life, or require going back to work for the newly retired. Work with an advisor to develop a structured income plan that will provide dependable short-term income while also providing enough growth to hedge against long-term inflation.
- Take advantage of catch-up contributions. The maximum contribution to 401(k), 403(b), TSP and most 457 plans in 2015 is $18,000, but investors over the age of 50 can add an additional $6,000, or total of $24,000 for the year. Additionally, you can contribute a catch-up contribution of $1,000 ($6,500 total) to an outside IRA or Roth IRA for yourself and a spouse. Many investors are surprised to learn that, even if your spouse does not have earned income, you can contribute in their name. As long as you have at least as much household income for the year as your total contributions, this may be an option to consider. Speak with a financial or tax professional to identify a contribution strategy for your individual situation.
“National Save for Retirement Week should be a time for evaluation, especially if you are a baby boomer. Take some time and put some effort into your retirement planning, it may just be the best thing you ever do for yourself,” says Chamberlin.