Retirement should be relaxing – not stressful.

Starting to save later in life isn’t something to be ashamed of. We see it all the time! But, people in their 40s can be anxious, stressed, and worried that they won’t have time to get their savings in check.

In reality, retirement planning in your 40s is possible. In fact, your 40s and 50s tend to be your highest earning years. Therefore, making it an ideal time to re-vamp and adjust your plans.

That’s why we’ve up with the retirement planning tips below for those starting later in life.

1. Consider Your Timeline

The first thing you’ll need to do is analyze your retirement timeline. Meaning, at what age will you’ll want to retire. If it’s within 20 years, you’ll likely want to save more in a shorter amount of time. However, if you are planning on retiring later, you can adjust the dollar amount to less.

One thing you do need to be careful of is how realistic your horizon seems. In an ideal world, everyone would have a large sum of money to put aside each year. But, unexpected expenses can come up. Therefore, it’s in your best interest to visit a financial advisor to see what would be the right amount for you.

Without the help of a professional, like us at A.P Accounting and Tax Services, you can over-extend. Resulting in disappointment and an unrealistic savings plan.

2. Speak to Your Employer

Many employees are unaware of the benefits and retirement plans offered by their employers. But, when it’s time to get serious about your retirement plans, you must speak with them about it.

Oftentimes, employers offer things like pensions, employee share ownership plans, and group savings programs.

These programs can help grow your retirement savings faster (especially if they offer things like a full or partial contribution match). And, it can eliminate the stress of having to move money around yourself as they automatically deduct from your paycheck.

Regardless of what programs your employer offers, it’s best to get the information from the first and present it to your financial planner. From here, they can suggest what the best option would be and if (and how much) it can help you.

3. Consolidate Accounts

To put it plainly – get a grip on all of your accounts. If you already have savings in an account, you might want to move it to another. For example, a 401(k) rollover into an individual retirement account can consolidate any former employer accounts. Not only will this keep all your money in one place but doing this will protect you from having to pay tax on a withdrawal.

4. Invest in a Roth IRA

Many people in their 40’s or 50’s believe in the myth that they shouldn’t invest in a Roth IRA. But, a Roth IRA is a great investment plan for people in their 40’s. One of the main reasons we suggest this is because it offers you more lenient withdrawal penalties.

Qualified withdrawals from this account can be tax-free. And, it gives you more time to invest. That’s because a Roth IRA does not require you to start taking distributions by age 70½ and you can keep making contributions past that age.

Saving for retirement can be intimidating. But, with a strong financial plan and dedication, you can meet your goals. For advice or a free consultation, call us today at 407-328-5001.

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