Is your retirement plan on track? If it is, you are in the minority. According to Investopedia, most people are “dangerously behind” when it comes to retirement savings by the time they are in their 40’s. The group who is nearest to retirement, individuals between the ages of 55 and 64, do not have nearly enough money saved. Their average savings, according to Investopedia, is just $104,000. This would produce an income of only $310 monthly to live on. This is simply not enough for most seniors.
You should take steps throughout your life to make sure you are saving enough for retirement and to ensure that you are investing your money properly. You cannot afford to wait until you are nearing retirement age or it will be much more difficult for you to save enough to have financial security as a senior.
You should talk with a Connecticut retirement planning lawyer at Nirenstein, Horowitz & Associates early on to get advice that is appropriate based on your age and income level and you should keep in regular contact with an advisor in order to make sure that you are still on track.
How Do You Know if Your Retirement Plan is on Track?
It is difficult to know if your retirement plan is on track, because everyone’s situation is different. You need to consider both whether you have actually saved enough for retirement, based on your age, and also whether you are using the right kinds of accounts to save for retirement.
You do not want to invest in a traditional investment account, for example, if you are eligible to invest in an account that would provide you with both tax breaks and greater protection for the assets within the account. You also need to make sure that your portfolio is balanced- which means you have the right mix of investments- and that you’re investing safely and not falling victim to scams or pyramid schemes.
As far as the amount of money you need to save, there are different metrics, some of which focus on the percentage of your income you should be setting aside and others which focus on the amount you should have saved by a certain age.
However, your own goals may not be the same as the ones assumed by those who create these generic standards. Your best option is to get personalized advice from a retirement planning lawyer who can let you know if you’re on track based on your specific plans for your future.
What Can You Do if Your Retirement Plan is Not on Track?
If your retirement plan is not on track, you’ll need to step up your savings and make sure that your investment portfolio is properly balanced so you have the best chance of earning the returns on your money that you need to grow your wealth.
You should invest in a 401(k) if your employer offers such a plan at work, at least up to the maximum amount of the employer match. If your employer matches a percentage of your contributions and you aren’t making those contributions, you are throwing away free money. You can automate the process by having money taken directly out of your paycheck and put into your 401(k) so you don’t have to think about actually transferring money to retirement accounts each month.
You should also consider opening an Individual Retirement Arrangement (IRA), which provides more opportunities for tax-free investing. You can choose between a traditional IRA to invest with pre-tax dollars or a Roth-IRA to invest with after-tax funds but to get tax free growth so you can withdraw money without paying taxes when you take out your investment and gains.
There are income limits and other rules for IRA investing, and maximum contributions allowed for both Roth and traditional IRAs, so you should talk with an experienced attorney to find out what you are allowed to do and what your best option is for investing enough to give you retirement security.
Getting Help from A Retirement Planning Lawyer
Nirenstein, Horowitz & Associates can provide you with guidance if you want to ensure that your retirement plan is setting the stage of your future financial security. Our legal team will help you to determine how much to invest, will assist you in evaluating investment plans and investment opportunities, and will guide you in the effective use of legal tools to protect your retirement nest egg. We can also help you to take advantage of tax benefits that come with using certain kinds of retirement savings tools, such as IRAs.
To learn more about the ways in which our legal team can assist you with your retirement plan, join us for a free seminar. You can also give us a call at 860-548-1000 or contact us online to get personalized retirement planning advice at all stages of life. Don’t wait and get behind on your retirement savings. Give us a call today.