3 Smart Ways to Save for Retirement When You?re Behind

HSATime seems to fly by like a speeding train. It feels like you graduated from high school yesterday, but then you blink and get an email about your 25th reunion. Another blink, and you have two grandkids. When did all that happen? You might feel this way especially when you look at your retirement fund. Years passed in the blink of an eye, and now you?re behind on your retirement savings.

If this describes you, don?t get discouraged. You can still enjoy an inspired retirement. Depending on your age and income, you can make up for lost time and catch up on your retirement savings. Even if you?re close to retirement age, you can make changes that will allow you to feel secure about your financial future.

Debt payments are stealing from your future. Get mad! Then decide to get rid of debt.
Use the debt snowball method. When you?re done, all that extra cash can go toward your retirement.
And, yes, pay off your mortgage. You might get a tax break from mortgage interest payments, but that deduction might be less than the interest you?re paying every year, so you could save more by getting rid of the debt entirely. Imagine how much money you could put toward retirement if you were debt free. That could fund an inspired retirement for sure.

Look at the percentage of your salary you?re putting into your company?s retirement program if you have that option. The second thing to check is whether or not you?re taking full advantage of any company match. Your company might match your contribution up to a certain percentage of your income. If your company matches 4 percent, but you?re only investing 3 percent, you?re missing out on free money.

If you?re like many people, you participate in a savings program but you aren?t investing enough. Once you?re debt free, you need to invest at least 15 percent of your annual income for retirement. Saving 7 percent or 8 percent of your net pay isn?t enough.

Generally speaking, you can contribute $18,000 a year to a 401(k). If you?re 50 or older, you can use the catch-up option and increase your contributions to $24,000 a year, according to the IRS. There are some income restrictions, though, so research your options before making changes.

If you are intensely inspired about your retirement, you can also contribute to an individual retirement account ? either a traditional IRA or a Roth IRA. You can invest up to $5,500 a year if you?re under 50 or up to $6,500 if you?re 50 or older. You might not be able to max out your contributions every year, but putting away a little extra is better than nothing.

In order to ramp up your savings, you might need to say goodbye to some of the extras you?ve come to enjoy. Drink office coffee instead of spending $6 a day on lattes. Ditch all those cable channels and use a streaming service instead. Stop trying to keep up with the Joneses ? they?re up to their eyeballs in debt.
As you get raises and bonuses, keep your lifestyle the same. Making more money doesn?t mean you need to spend more money.

(Source: TCA)