Retirement Savings Tips for Those Over 40

Retirement looms closer on the horizon. Youíre over 40 and until recently you havenít really thought about saving for retirement as being that important. Now that youíve noticed how close itís getting, you wonder if there are retirement savings tips for those over 40.

When you just get out of college and start that full-time job in your chosen career, you really donít think about starting to save for retirement. Donít despair; there are still things you can do now that will help you to build a retirement account. Remember, the sooner you begin saving, the better off your bank account and future will be.

Consider the following ways to begin saving money. Any money that is saved can be deposited into your retirement account. When you continue to make regular deposits, the fund will increase and you will earn more compounded interest.

1. Adjust your way of thinking. You may believe itís too late to save for retirement. Get rid of that type of thinking. Even though starting to save at an earlier age would have been better, your financial future is more important than giving up.

2. Begin to save now. The more money you can save, the better off you will be. Keep track of your spending for a couple of weeks, and then see where your money is going. Decide if there are things that you can adjust in your budget to start saving sooner rather than later.

3. Earn more money. Perhaps you can work overtime or get a part-time job during your off-hours. Check with an accountant to see what the rules are for working while drawing your Social Security checks, also.

4. Leave your money alone. Donít take money out of a retirement fund once it has been deposited, unless there is an emergency and you really donít have a choice.

5. Seek help.† Donít be afraid to ask for help from a financial advisor.† You want to hire someone who is a fee-only planner, not someone who earns commissions.

6. Sign up for a 401(k) program at work. If you havenít already done so, sign up for your employerís 401(k) plan during their next open enrollment. This is deducted pre-tax, most companies match the funds you deposit (up to a certain percentage), and it can be automatically deducted so you wonít even miss it.

7. Start an Individual Retirement Account (IRA). You can contribute up to $4,000 per year into these accounts and the deposits may be tax deductible.

8. Make an extra mortgage payment.† If you still owe on your home, making an extra mortgage payment each year can help lower the amount of interest that you pay in the long run.

9. Transfer credit card debt. Transferring all credit card debt to a card with lower interest could help you save money. Read the fine print before making the change, however, because they credit card company may not maintain the lower interest rate after a trial period.

10. Check your current utility bills. You could save money by making simple changes at your home. Reducing the temperature of your water heater from 140 to 120 degrees can save you 10-15%. Turning lights off and switching to more energy-efficient light bulbs are other ways to get additional savings.

These retirement savings tips for those over 40 may not make a huge difference immediately, but they can help you save money for the future. Remember to use these tips to help you cut expenses and make further deposits to your retirement account.†

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