Catch-up retirement savings options
For those who got a late start
Entering your 40s or 50s and behind in your retirement planning goals? Don't fret. You've still got time to get your financial plan back on track. There are many steps that older investors can take to help better prepare themselves financially for retirement.
If you have access to a 401(k) or other workplace-sponsored plan, you can go beyond the standard $20,500 contribution (for 2022) limit once you reach age 50 and above. People age 50 and up can contribute an additional $6,500, for a total of $27,000.
A similar benefit of reaching age 50 applies to those who own an IRA. In 2022, the standard contribution limit is $6,000, but those age 50 and above can contribute an additional $1,000 for a total of $7,000.
Consider also how you can trim expenses while continuing to enjoy life. Some suggestions for quick savings: Eliminate or reduce premium cable channels that you do not watch, memberships that you do not use regularly, and frequent splurges on dining out or coffee runs. An extra $100 a month saved today could make a big difference 10 or 20 years from now.
Most importantly: don't give up. Many pre-retirees falsely believe that there is nothing they can do to build retirement assets and, as a result, do nothing. Remember that you control how much you invest and, in many areas, how much you spend. Make a plan – and stick with it.
Important note: Equitable believes that education is a key step toward addressing your financial goals, and this discussion serves simply as an informational and educational resource. It does not constitute investment advice, nor does it make a direct or indirect recommendation of any particular product or of the appropriateness of any particular investment-related option. Your unique needs, goals and circumstances require the individualized attention of your financial professional. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.
Equitable Financial Life Insurance Company (New York, NY) issues life insurance and annuity products. Securities offered through Equitable Advisors, LLC, member FINRA, SIPC. Equitable Financial Life Insurance Company and Equitable Advisors are affiliated and do not provide tax or legal advice.