Do I have enough to retire? Retirement planning can weigh heavily, but it doesn't need to. Follow these retirement savings guidelines to help ensure that your 401(k) and IRA contributions are maximized. Learn more with TD Ameritrade.
Chances are you’ve put an actionable retirement plan into place, but sometimes life can get you sidetracked. It’s a question that weighs on the minds of most investors during their working years: Do I have enough to retire?
The answer, however, isn’t so cut and dried. Much depends on factors like:
As you start thinking about your answers, a good place to begin is with the TD Ameritrade Retirement Calculator. It can help you estimate what you may need to save to reach your retirement savings goal. If you determine you’re on the right track, then keep plugging away and stay consistent with your plan.
If you need to make changes to your retirement plan, here are the next steps you can take to help your nest egg play catch-up:
Every dollar counts, and there’s still time to make adjustments. Revisit your goals to make sure they’re realistic and achievable. You may be able to make adjustments to your plan, such as spending less in your retirement years, or working longer to achieve your plan. When planning out your retirement goals, a helpful approach is to use the acronym “SMART" to help ensure your goals are specific, measurable, attainable, relevant, and timely; helping you stay focused in your retirement planning journey.
Where are you spending money, and is it possible to make reductions? The money you save can be invested, put in a savings account, or used to increase your 401(k) contributions. If you receive a year-end bonus, you can create a plan to allocate all or a portion of it to your 401(k).
Set up payments to automatically draft funds directly into your retirement account, making it easier for you to make contributions without forgetting.
For 2018, the total annual IRA contribution limit—for both Traditional and Roth IRAs—is $5,500, unchanged from 2017. However, if you’re over 50, the IRS currently allows catch-up contributions to a Traditional or Roth IRA of an additional $1,000, for a total of $6,500.
Contribution limits for 401(k) plans, however, get a $500 bump in 2018, to $18,500. And if you’re over age 50, you can contribute an additional $6,000 to a 401(k), for a total of $24,500.
Purchase an annuity.Annuities can offer alternative income to help cover living expenses during your retirement years. Some types of annuities are helpful in potentially creating a guaranteed stream of income for you to use throughout your retirement.
Extend your employment years.Consider taking a step down, rather than retiring altogether. A step down could mean cutting back on hours or taking extended vacations while you continue the flow of income and health benefits.
Downsize your home.When you’re near retirement, the maintenance of a larger home can be unnecessary, expensive, and overwhelming. A smaller abode could free up income and time for you to do the things you want in your retirement. As a bonus, a new trend is circling the home building community: Try before you buy. This gives new homeowners a chance to test out their community amenities before committing.
Work a part-time job after retirement.Maybe you’re a little behind in your retirement savings plan, or maybe you just want to use these years as an opportunity to try something new. If your employer has a 401(k) plan, great. If the company matches contributions, even better. If so, try to contribute at least enough to get the full match. A part-time job is a great way to pursue your passions in your retirement years and gain a little money in the process.
Pursue a “retirement side gig."An alternative to a part-time job is to turn your hobby into your own business or “side gig." Sole proprietors and small business owners can continue to make retirement contributions via a SEP IRA plan, for example, and get a tax deduction for contributions (subject to IRS limits), plus get tax deferred growth on the plan investments.
When you evaluate your funds, you’re taking action to ensure you stay the course on your retirement plan. Just remember—it’s never too late to take a step back, evaluate your plan, and adjust it accordingly.
for thinkMoney ®
Financial Communications Society 2016
for Ticker Tape
Content Marketing Awards 2016
Annuities are long-term investments designed for retirement purposes. Withdrawals of taxable amounts are subject to income tax and, if taken prior to age 59½, a 10% federal tax penalty may apply. Early withdrawals may be subject to withdrawal charges. Optional riders are available at an additional cost. All guarantees are based on the claims paying ability of the insurer. An annuity is a tax-deferred investment. Holding an annuity in an IRA or other qualified account offers no additional tax benefit. Therefore, an annuity should be used to fund an IRA or qualified plan for annuity features other than tax deferral. Product features and availability vary by state. Restrictions and limitations may apply.Investment and Insurance Products: Not FDIC Insured * No Bank Guarantee * May Lose Value.Insurance products/services are offered through The Insurance Agency of TD Ameritrade, LLC. Brokerage services provided by TD Ameritrade, Inc., member FINRA/SIPC. The Insurance Agency of TD Ameritrade, LLC and TD Ameritrade, Inc. are both wholly owned subsidiaries of TD Ameritrade Holding Corporation.
TD Ameritrade does not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances.
Market volatility, volume, and system availability may delay account access and trade executions.
Past performance of a security or strategy does not guarantee future results or success.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.
Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.
The information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade.