5 Ways to Quickly Catch Up on 401(k) Savings over Age 40 In this video I am talking about 5 Ways to Quickly Catch up on 401(k) Savings over Age 40. Hi everyone, it's Matthew Jackson here from 401(k) Maneuver. We provide online professional account management with the goal of supercharging your 401k performance. Stop leaving money on the table each and every year in the form of lost returns. Let us help you! Subscribe to our channel: Click here to book a complimentary 15-minute 401k Strategy Session with us: Visit our site: Click to Enroll Today here: If you’re wanting to catch up on 401(k) savings and are over the age of 40, it may seem overwhelming when you think about how you’re going to do it. Just follow these 5 steps below to quickly catch up on 401(k) savings over age 40, and you’ll be shocked at how much you can save in the years to come. #1 Get a retirement plan in Place ASAP If you don’t have a plan for how much you’ll need for retirement, you need one in place immediately. With a target amount in mind, you can work backwards to see exactly how much you need to stash away in your 401(k) each pay period. If you’re really behind on 401(k) savings over age 40, you may also need to contribute additional funds to an IRA or Roth IRA. Check out our 401(k) calculator: to calculate how professional help may improve your future retirement income. If you’re stuck, we recommend seeking third-party advice as soon as possible. #2 Maximize Your Retirement Savings This Year Now that you have an idea about when you will retire and how much you need to save, try to max out your 401(k) this year. Employee contribution limits for 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan are $20,500 for 2022 – up from $19,500. For those age 50 and older, the 401(k) catch-up contribution remains the same at $6,500 for 2022. If you turn 50 anytime during December of 2021, you’re still eligible to contribute the additional $6,500. Related Read: retirement plan Contribution Limits for 2022 #3 Avoid Target Date Funds A majority of retirement account investments are in target date funds (e.g., 2030, 2045 funds). Target date funds are structured to automatically reallocate as you move through different life stages. However, target date funds are actually riskier than many people perceive. Investing in target date funds and not actively managing your retirement account is equivalent to saying there’s a one-size-fits-all investment strategy that works for everyone. Download our guide 5 Ways Target Date Funds Fail to Live Up to Their Promise. #4 Avoid Borrowing from Your 401(k) While it may sound like an attractive option should you need money, taking out a 401(k) loan can impact the quality of your retirement, have negative tax consequences, and cost you money and opportunity. Should your 401(k) plan allow you to pay back the loan and make contributions, the question is – can you actually do both at the same time? Related Read: Is It a Bad Idea to Borrow from My 401(k) to Get a House? #5 Roll Over Old Workplace Retirement Plans If you have changed employers over the years, it’s likely you have some retirement savings accumulated from previous jobs. Leaving behind a 401(k) with a past employer “has the potential to cost an individual almost $700,000 in foregone retirement savings over a lifetime.” You have three options when it comes to moving your old 401(k): Roll over into your new employer’s 401(k), providing it’s allowed. Roll over into an IRA or Roth IRA. Cash it out. Cashing out an old 401(k) is not advisable for tax and penalty purposes – and the fact that you want your money growing for you so you can use it later in retirement. We recommend seeking third-party advice to help you make the best rollover decision possible. Before you make your move, click here to discover the 5 Costly 401(k) Rollover Pitfalls. saving for retirement retirement planning 401k savings...(read more)
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5 Ways To Quickly Catch Up on 401k Savings Over Age 40 Saving for retirement is crucial, and for those who may have fallen behind on their 401k savings, it's essential to catch up as soon as possible. While it might seem daunting, there are several strategies you can employ to quickly boost your retirement savings, even if you're over age 40. Here are five ways to help you catch up on your 401k savings: 1. Maximize your contributions: One of the most effective ways to catch up on 401k savings is to increase your contributions. Take advantage of the catch-up contribution allowance, which allows those aged 50 and older to contribute an additional $6,500 on top of the standard $19,500 contribution limit for 2021. By increasing your contributions to the maximum allowed, you can rapidly accelerate your retirement savings. 2. Automate your savings: To ensure consistent savings, set up automatic contributions from your paycheck. By making this a recurring process, you won't have to rely on remembering to set aside money each month. This way, you will guarantee a regular flow of funds into your 401k account, helping you catch up on savings without any extra effort. 3. Reallocate your investments: Consider reassessing your investment strategy to optimize your returns. When you're in your 40s, your portfolio should be more geared towards growth. Consult with a financial advisor or do your research to diversify your investments and potentially earn higher returns. However, make sure to also consider the level of risk you're comfortable with when reallocating your investments. 4. Take advantage of employer match: If your employer offers a match program, make sure you contribute at least enough to capture the full match. Company matches are essentially free money added to your retirement savings. By maximizing this benefit, you're effectively increasing your contributions without any additional cost to you. 5. Consider a Roth IRA conversion: If your employer allows in-service distributions, you might consider a Roth IRA conversion. This involves transferring a portion of your 401k funds into a Roth IRA. Although you'll pay taxes on the converted amount, you'll enjoy tax-free withdrawals in retirement. A Roth IRA could be a valuable addition to your retirement savings plan and provide you with more flexibility in managing your tax liabilities. While catching up on retirement savings may feel overwhelming, it's vital to start as soon as possible to secure a comfortable retirement. By following these strategies, you can quickly boost your 401k savings over age 40 and work towards a financially secure future. Remember, consistency is key, so stay committed to your savings goals and regularly reassess your progress to ensure you're on track. https://inflationprotection.org/5-efficient-methods-to-speedily-boost-your-401k-savings-after-turning-40/?feed_id=120240&_unique_id=64bd5cf50b214 #Inflation #Retirement #GoldIRA #Wealth #Investing #401k #401kCalculator #401krollover #401krolloveroptions #401ksavings #5waystoquicklycatchupon401ksavingsoverage40 #AvoidBorrowingfromYour401k #AvoidTargetDateFunds #FinancialPlanning #GetaRetirementPlaninPlace #MaximizeYourRetirementSavingsThisYear #Retirement #RetirementPlanContributionLimitsfor2022 #retirementplanning #retirementplanningat50 #retirementplanningat60 #RollOverOldWorkplaceRetirementPlans #savingforretirement #401k #401k #401kCalculator #401krollover #401krolloveroptions #401ksavings #5waystoquicklycatchupon401ksavingsoverage40 #AvoidBorrowingfromYour401k #AvoidTargetDateFunds #FinancialPlanning #GetaRetirementPlaninPlace #MaximizeYourRetirementSavingsThisYear #Retirement #RetirementPlanContributionLimitsfor2022 #retirementplanning #retirementplanningat50 #retirementplanningat60 #RollOverOldWorkplaceRetirementPlans #savingforretirement
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