5 Practical Tips To Catch Up On Retirement Savings

Having a safe and predictable retirement generally means saving as much as you can as often as possible.

If you are worried that you do not have enough money to maintain your lifestyle in retirement, there are ways to get back on track. Here are some practical tips to put your mind at ease and get you excited for retirement again!

1. Increase Your Retirement Contributions

If you have a work sponsored 401(k) plan, this is an effective way to catch up on retirement savings. Finding out if your current employer offers a match is the first step as that should be the minimum you invest since it’s free money. You can contribute all the way up to $19,500 in tax deductible contributions per year with an employer sponsored 401(k) plan.

If you have an IRA, you can contribute up to $6,000 a year. While there will be no match, an IRA is still a vehicle you can use to catch up on retirement. If you have a ROTH IRA (after tax contributions) you can utilize both your employer sponsored 401(k) and Roth IRA and contribute a total of $25,500 per year to your retirement accounts annually.

If you have a 403(b) (for private nonprofits and government workers including public schools) or 457 (state and local government sponsored plans) you have the same contribution limits of $19,500 per year.

2. Utilize an HSA Account

HSA stands for health savings account. HSAs are designed to help you pay for your current healthcare expenses and save for future healthcare expenses. You can make tax deductible contributions up to $3,600 per year or $7,200 if you are married. With an HSA you will also earn interest tax-free and take tax-free withdrawals to pay for qualified medical expenses.

Payments from this account must be used for a qualified medical expense or withdrawals from this account are subject to income tax and may have additional penalties up to 20% if done before the retirement age of 65. If you qualify, the HSA account is a great vehicle to catch up on retirement savings because of the incredible tax savings.

To be eligible for an HSA account you must be enrolled in a high deductible health plan and be a US taxpayer.

You may not be eligible to use an HSA account if you can be claimed as a dependent on someone else’s tax return, you or a spouse cannot be covered by a disqualifying insurance coverage like Medicare, and you or a spouse cannot be covered by a full-purpose flexible spending account of health reimbursement arrangement.

A healthy 65-year-old couple retiring in 2019 will need close to $390,000 to cover health-care expenses according to HealthView Services. With the cost of health care continuing to rise, you should consider an HSA account if you are eligible.

3. Take Advantage Of Catch-up Contributions.

Another retirement savings tip is that you may each be able to contribute up to $1,000 more to your IRAs if you are age 50 or older. You can make catch-up IRA contributions to your Traditional or Roth IRA in accordance with IRS income rules. If you are eligible for an HSA account, you can also contribute up to $1,000 more per year if you are aged 55 or older.

Under the age requirement of 50, you can contribute an extra $6,500 per year in an employer sponsored 401(k). This would put your total contribution limit to a total of $26,000! Plans of state and local governments (403b and 457 plans) may also allow catch-up contributions for participants who are aged 50 and older.

If you take advantage of both traditional catch-up contributions, you could contribute a total of $7,000 in an IRA and $26,000 in an employer sponsored 401(k) plan totaling $33,000 every single year!

4. Increase Your Income

If you are not able to increase your retirement contributions, increasing your income can be the next best thing. You may be able to approach your employer and ask for more responsibilities in addition to a raise. If you are in sales or have overtime opportunities, you could increase your hours to increase your income.

If your income is capped, you could pursue a 2^nd job that offers flexible hours. While this may not seem like much at the time, if you invest this income, it could be the difference from having a stress filled retirement to having a safe retirement.

5. Decrease Your Expenses

If you are unable to increase your income or your retirement contributions, then you can look to decreasing your monthly expenses. If you do not have a monthly budget set up, that should be your first step. Once you set up your budget, compare that to your bank statement. You may be shocked to see how much extra you spend per month. You may even find subscriptions that you are still paying for that you have not used in months!

Shopping around for the best prices for recurring expenses like a phone plan, insurances, and cable could help you save thousands of dollars per year. Taking this saved money and putting into your retirement accounts is an incredible way to help catch up on your savings.

We understand how stressful preparing for retirement can be. These 5 practical tips combined with the Retire Safety First Approach can bring you the peace of mind you need for retirement.

At Retire Safety First we believe everyone has a right to a safe, secure and predictable retirement. Our goal is to remove the fear and uncertainty out of retirement, to provide peace of mind for retirement.

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Consumer Prices Remain High In October

By Bret Laporte • November 11, 2022

The consumer price index increased 0.4% for the month and is up 7.7 percent from a year ago according to the Bureau of Labor Statistics. While price increases are still rapid and painful for many households, they are finally beginning to show signs of progress. The inflation index picked up by 7.7 percent in the year through October*, less than the 7.9 percent that some analysts had expected. Even with this positive news, inflation remains well above the Fed’s 2% target and several areas of the report show that the cost of living remains high. Shelter costs, which make up about one-third of the CPI, rose 0.8% for the month, the largest monthly increase since 1990, and up 6.9% from a year ago, their highest annual level since 1982*. Also, fuel oil prices jumped 19.8% higher for the month and are up 68.5% over the past 12 months*. “One month of data does not a victory make, and I think it’s really important to be thoughtful that this is just one piece of positive information, but we’re looking at a whole set of information,” San Francisco Fed President Mary Daly said in response to the CPI data. _ Depending on how you prepare, retirement can be the most rewarding or stressful time of your life. To answer some of your questions about inflation and retire on your terms, Contact us or Call 860-757-3644 for a complimentary consultation. At Retire Safety First we believe you have a right to a safe, secure and predictable retirement. Our goal is to remove the fear and uncertainty out of retirement, to provide peace of mind for retirement. *All Statistics provided by the Bureau of Labor Statistics

Consumer Prices Rise In September

October 14, 2022

New inflation data released on Thursday showed that consumer prices climbed far more quickly than expected with a rise of .4% in September (according to the Bureau of Labor Statistics) as inflation pressures continue to weigh on retirees and the economy at large. The food index alone rose 0.8% for the month and is up 11.2% from a year ago. That increase helped offset a 2.1% decline in energy prices that included a 4.9% drop in gasoline. Energy prices have moved higher in October, with the price of regular gasoline at the pump nearly 20 cents higher than a month ago, according to AAA.

The Social Security cost-of-living adjustment will be 8.7% in 2023

October 14, 2022

The Social Security Administration announced that cost-of-living adjustment will be 8.7% in 2023, the highest increase in 40 years. The average Social Security retiree benefit will increase $146 per month from $1,681 in to $1,827 in 2023. However, with inflation continuing to rise at dangerous levels, it is important to be aware of the possibility that these cost-of-living adjustments may not be enough to maintain your lifestyle throughout retirement.

2023 Medicare Premium Changes

By Bret Laporte • October 5, 2022

The Centers for Medicare & Medicaid Services announced that 2023 monthly Part B premiums will decrease to $164.90 from $170.10. This change represents the second time in the past two decades that Part B premiums will decrease from the prior year. Pair that decrease with the expected 8.7% increase in Social Security’s annual cost-of-living adjustment (COLA), many retirees could see a substantial increase in their monthly Social Security checks in 2023.

The Incredible Benefits Of Spending Time With Your Grandchildren

January 13, 2022

Now that you are transitioning into retirement, you are free to do more of what you love with the people you love. Creating memories with your grandchildren will be something each of you cherish and hold on to. Did you know two out of three grandparents think being a grandparent is the most important and satisfying thing in their lives? Here are some of the incredible benefits of spending time with your grandchildren: 1. Increase Happiness For Everyone A close relationship between grandparents and grandchildren has shown to decrease symptoms of depression for both generations. Grandparents in the study were found to be less depressed when they received or gave tangible help to their grandchildren. Anything from rides to school, advice on life, or helping financially were contributors to lessened depressive symptoms found in older adults. Children with a high level of positive grandparental involvement have shown fewer emotional and behavioral problems and are seen to be more secure and significantly happier. 2. Sharing Family History Grandparents have incredible insight to family history. Teaching your grandchildren about where they come from, and the struggles and successes of the family helps grandchildren better understand their unique history. Grandparents may have family heirlooms to pass down, like photo albums and family recipes that grandchildren would greatly value. Grandparents who share their fondest stories can keep their memories alive. Every family is unique in its makeup and journey. Grandparents can unlock their history and make it a part of the present for younger generations. 3. Keeps You Socially And Physically Active Playing with grandchildren can be a fun and rewarding way to remain physically active. Whether you’re playing a game of catch, walking around the shopping mall, or taking a relaxing walk around the park, the exercise and memories created are great for each of you. Taking your grandchild out could provide opportunities for meeting other adults, and grandparents. This social interaction can help you find and grow your social circle throughout retirement. 4. Becoming A Role Model As retiree’s age, they can struggle to find purpose. Becoming a role model to your grandchildren is one of the most fulfilling and loving things you can do. You’ll be able to share all your life experiences to help teach a new generation. Afterall, now is the time to do more of what you love with the people you love.