For some, especially during these tough market conditions, their retirement investments and savings may have declined. Due to this setback, your retirement timeline may have been pushed back, tightening your budget, making you work more years than you planned, and has put pressure on your overall retirement longevity. If this is you, you’re not alone! And there are opportunities you may have to boost your retirement savings to get back on track.
Contribute to a 401(k) or Traditional IRA to reduce your taxes for that year. Since 401(k) and Traditional IRA contributions are deducted from your income for the year the contributions were made, you can save on taxes by utilizing these instruments while putting more into your savings for the future. In addition, your employer may offer 401(k) matching for your accounts, meaning that they’ll contribute a certain amount based on what you contribute! For example, you could see a 5% boost to your contributions if your employer matches 5% of employee contributions. Taking full advantage of matching contributions can help you see your retirement investments grow and get back on track.
In addition, you may not have known that your annual contribution limits for IRAs and 401(k)s increase by $1,000 once you hit 50! Suppose you’re looking to get your retirement accounts back on track. In that case, you could benefit extra by increasing your yearly contributions, letting more of your money benefit from a potential stock market rebound.
If you have other income sources or can still work full- or part-time, consider delaying the time you choose to officially claim Social Security benefits. If your market-exposed accounts took a hit, you don’t just have to hope for an immediate market rebound to get back on track. Instead, suppose you have supplemental income sources such as annuities, savings accounts, or even universal life insurance. In that case, you can wait until you’re 72 to claim Social Security to access a maximum benefit amount. That way, you can give your retirement accounts the time they need to recover from a market downturn before withdrawing from them.
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This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products. Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results. Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.