On the first day of this year, tech executive and author David Bressler had a note on his calendar to start contributing more to his retirement accounts.
Bressler is turning 50 later this year but he’s already capitalizing on what experts say is one of the most important things 50-somethings can do for their retirement savings: catch up.
Even the industry demonstrates this — employer-sponsored retirement accounts and individual retirement accounts have “catch-up contributions,” which allow investors to put away more money in their accounts beginning the year that investor turns 50.
“You have to do what you can to plan for the future,” Bressler said. “You always have to be squirreling away.”
Many 50-somethings are at the crossroads of their lives — between big life events that may have already occurred, such as buying a home and getting married, and the children they raised are becoming financially independent, also known as “empty nesting.” When expenses start to dwindle is the perfect time for 50-somethings to start ramping up their retirement savings, especially if they don’t have much in those accounts. By your 50s, you should have saved four or five times your annual salary, though those in their 50s have an estimated median savings of about $117,000, according to a 2015 Government Accountability Office analysis. Unfortunately, some people just can’t afford to retire yet.
Catching up doesn’t have to be overwhelming — whether you have kids or not, expenses can be downsized, which would allow the average 50-something to put more money away for their retirement. Some people choose to move to a smaller home, or rent, to alleviate paying off a mortgage for a home too large and perhaps not fully used. Buying a smaller home could also save on taxes, utility costs and insurance, according to business forecasts…