On this episode of Saving the American Dream, we’re talking about retirement’s late bloomers.
Sometimes, people fall behind in their savings. Life’s going to get in the way, and you’re going to have to make some adjustments. You might not save as much as you want to, but don’t worry. There are ways where you can make up some ground and find some opportunities.
If you are looking to catch up using retirement plans, there’s definitely some opportunity to do so. You should contact a financial professional.
First, once you turn 50, you can contribute an additional $1,000 a year to your Roth IRA – $7,000 instead of $6,000. And you can contribute an extra $6,500 into a Roth 401k.
You can also make up some ground with your expenses. One area where a lot of people are able to save money is when their kids come off the payroll and start paying for their own cellphone, car insurance, etc.
As we’re going through our working years and our child-raising years, we want to make sure that we have a balance and that we’re saving enough money to be able to financially take care of ourselves and live life on our terms for the rest of our life.
If we do this the wrong way, if you don’t have that balance, you could end up in a position where you’re giving your kids everything they want and need now. But 30 years from now, you’re going to be a drain on their balance sheet because you didn’t save enough money for yourself.
We want to be putting 20% of our gross income away for the future. If you need to be in catch-up mode, you might need to be saving 35% of your gross income.
Listen to the full podcast or use the timestamps below to jump to a specific section.
Navigating the Show
[4:02]– Catch up contributions
[7:20] – Expenses
[10:41] – Debt
[13:07] – Downsizing
[15:06] – Twilight career
[18:35] – Mailbag: Two brokers
[20:17] – Mailbag: Budget
“As we’re going through our working years and our child raising years, we want to make sure that we have a balance and that we’re saving enough money to be able to financially take care of ourselves.”
– Michael Schulte