Maximizing your retirement savings and tracking your progress goes a long way towards achieving the retirement lifestyle you desire.
With IRA contributions due by April 15th, this is a good time to talk about retirement planning and to determine whether you are on track to meet your long term goals.
Here are three ways to maximize your retirement savings:
- Contribute to the appropriate type of retirement account:
- If you’re a working: Take advantage of the 401(k) or other employer-sponsored retirement plan — such as a 403(b) or 457 plan. You want to maximize your contributions if you can. The 2020 contribution limit is $19,500 and if you are over 50 you can make catch-up contributions of up to $6,500, for a potential total annual contribution of $26,000.
If you haven’t contributed to your IRA yet, you have until April 15th to contribute for 2019. The 2019 and 2020 limit for contributions to Roth and traditional IRAs is $6,000 or $7,000 if you’re 50 or older.
- If you’re married, but don’t work outside the home: Make contributions to a spousal IRA.
- If you’re self-employed: Are you saving for retirement? If so, do you have the right type of plan? Don’t overlook the retirement plan options available to you i.e. SEP IRA, Owner 401(k), etc. This is one of the best strategies for building value outside of your business.
2. Consolidate your retirement accounts: Consider consolidating multiple IRAs and rolling over 401(k) s from previous employers. If you are no longer with the company, your money shouldn’t be there either. By consolidating into an IRA, it gives you more flexibility in terms of investment options and gives you a better picture of your portfolio.
3. Determine whether you are on track to meet your goals: It is important to know how much money you need to fund your retirement and to track your progress at least annually. You can use this Ballpark Estimate tool from the American Savings Education Council to determine whether you are currently on track.
Retirement planning is not just about the numbers. It starts with your goals. What does retirement look like for you?
You are in control….
You are in control of your financial future. Careful planning and a long term strategy can go a long way towards achieving your long term retirement goals and living the retirement lifestyle you desire.
If you would like to learn more about your relationship with money, take the “Money Type Quiz.” Only you see the results.