Are you feeling behind on your retirement goals? If you are, you’re not alone. Recent surveys by CNBC show that more than half of Americans don’t believe they’re on their way to a comfortable retirement. 59% of those aged 35-65 said they were not on track with their 401(k) savings to retire comfortably. 56% of all survey said that they have no savings outside of their mortgage and a Roth IRA.
With rising costs of living and financial pressures, it’s a tough time for many to save. But don’t lose hope. There are steps you can take to improve your financial outlook and get back on the path to a secure retirement.
The Income Boost: Side Hustles and Beyond
A side hustle isn’t just for the young and restless. It’s a smart way to add to your income at any age. With a variety of gigs out there, anyone can find something that suits their skills and schedule. From freelance writing to ride-sharing, the gig economy can be a gold mine for those looking to save more for their golden years.
But side hustles aren’t the only way to boost your income. Passive income sources like dividend-paying ETFs can add a steady stream of earnings to your portfolio with less hands-on effort than a traditional side job. Investing in bonds and CDs can provide fixed returns, and platforms like Fundrise allow for real estate investments that can generate income through rent or property appreciation.
Maximize Your Contributions
If you’re over 50, it’s time to supercharge your savings. Catch-up contributions are a perk offered by the IRS that allows older savers to add more to their retirement accounts each year. Whether it’s an extra $7,500 to your 401(k) or another $1,000 to your IRA, these additional dollars can compound quickly, bolstering your nest egg significantly by the time you retire.
The Power of Stocks
Investing in stocks might seem intimidating, especially as you get closer to retirement. But if you’ve still got a decade or more before you plan to retire, they’re worth considering. Historically, the stock market has returned an average of 10% over long periods. Shifting some of your savings into stocks now could mean a substantially larger retirement fund later, even if you don’t invest another cent.
A hands off way of doing this is through robo-advisors, a financial advisors, or buying ETFs and mutual funds on your own. These will give you a variety of options for getting into stocks without having to spend hours on research.
Feel Good About Retiring
Retirement should be a time to look forward to, not dread. By boosting your income, taking full advantage of tax-advantaged accounts, and investing wisely, you can shift your mindset from uncertainty to confidence. And with passive income streams in place, you can continue to build wealth even when you’re no longer punching the clock.
Now, let’s break down these strategies in more detail to see how they can be practically applied in your life to change the trajectory of your retirement planning.
Side Hustles: Not Just a Young Person’s Game
The beauty of the side hustle is that it can fit into the nooks and crannies of your life. It doesn’t have to mean driving strangers around at midnight or walking dogs in the rain. It could be something you’re passionate about, like starting a small online business or consulting in your area of expertise.
Passive Income Streams: The Silent Workers
Passive income is the holy grail for many savers. It’s money that comes in without the need for constant work. Dividend ETFs, for example, are a great choice for those looking for steady income with the potential for growth. They’re baskets of stocks that pay dividends, and these payments can be reinvested to grow your holdings or taken as cash to supplement your income.
Bonds and CDs offer a more predictable return, and while interest rates have been low, they are on the rise. These can be a safer part of your income strategy, giving you a stable foundation to build upon.
And then there’s Fundrise, a platform that lets ordinary investors tap into the real estate market. It’s a longer-term strategy, but one that can lead to substantial earnings through rental income and property appreciation.
Playing Catch-Up: Late Bloomers Welcome
It’s never too late to start saving for retirement, and the IRS understands that. Catch-up contributions are an invitation to save more as you get closer to retirement. Even if you’re just starting to save in your 50s, these additional contributions can make a big difference.
The Stock Market: Your Long-Term Friend
While younger investors can ride out the market’s ups and downs, even those closer to retirement shouldn’t fear stocks. The key is balance. If you’re 10 or more years out from retiring, having a well-thought-out portion of your portfolio in stocks could provide the growth needed to meet your retirement goals.
It’s Never Too Late to Start
Reading about the possibility of not having enough to retire comfortably is daunting. But remember, every step you take today improves your tomorrow. Start small if you must, but start. Use these strategies to take control, build your wealth, and shape a retirement that’s rich in possibilities and free from financial worry. And remember, you’re not alone on this journey. Countless resources, professionals, and communities are there to support you along the way.
Your retirement is not just about the end of your working life, but the beginning of a new chapter filled with opportunities. By empowering yourself with financial knowledge and strategies, you’re setting the stage for a future where financial concerns are minimized, and the joys of freedom and choice stand front and center. So, take that first step, keep learning, and build the retirement you deserve—one wise money move at a time.