21 Feb What You Should Be Doing for Retirement in Your 40s?
As a working adult in your forties, you might feel life is all set, and you’re right on track for a happy retirement. After all, you have been contributing to your 401k since the day you first started working. What else could there be left to do?
Even if you have a retirement portfolio, now is the time to check in on it. It might not be doing as well as you hoped. Let’s see what you can do to make the most of what you’ve got.
Make a Savings Choice
Are you stuck between contributing extra money to your children’s college fund and your retirement fund? You’re not being selfish if you choose to sock away more for your retirement than you are for your kids’ education. As a matter of fact, it could benefit them further down the road if you are actively preparing to take care of yourself. Institutions are always willing to provide loans for college-bound teens. However, there is no such thing as a retirement loan. Your kids will eventually pay off their college loans. And then, they won’t have to worry about how they are going to take care of Mom and Dad.
Take a Realistic Look at Your Future
Now is the time to start thinking about what retirement should look like. Discuss with your spouse where and when you hope to retire. It’s like the dieter who posts a picture of the bathing suit she wants to get into for summer. Having a better idea of your exact goal helps to keep you on track. If your desire is to move to Florida when you retire, you’ll be able to ask yourself, “Would I rather take this vacation to Hawaii now, or would I rather just have a weekend at the beach so I can live in Florida later?”
Checking on your progress now can also help you curb any negative trends you see. If your retirement portfolio currently contains stocks that are on a downward slide, you can catch it now and reinvest in something better. Be careful, however, there is a difference between a downward slide and a correction. In other words, don’t sell into a correction. Try to save more before it’s too late and you find out at the end of your career that you don’t have enough to retire at all.
Live Now as You Plan to Live Later
As you get older, hopefully, your paycheck will grow. Instead of living to the max of what you’re making, try to maintain your current lifestyle. Got a bonus at work? You might be thinking of upgrading your car to go with it. But is your current car still in good shape? You might be better off putting away that bonus money and sticking with your current vehicle. Evaluate the big items on your to-do or to-get list. House addition? Boat? Are you willing to sacrifice your future living standard by doing these things now? It’s something to consider.
Embrace automatic payroll deductions. You are less likely to spend what you don’t even remember being there in the first place. You’ll see those deductions again when you are withdrawing them at retirement.
Trying to picture life 20-30 years down the road isn’t easy. We are tempted to stay in the here and now. But it’s important to take a look at your retirement plan when you’re in your 40’s to make sure that you actually have a retirement to look forward to. If we can help you plan for later, don’t hesitate to give us a call.