Are on on track with your retirement savings?
Resist the temptation to dip into retirement accounts now, experts say.
For mature families, saving for retirement is no longer a long-term goal. This often means reassessing whether you’ve been saving enough, and could mean shifting some priorities to put retirement savings higher on the list.
Even if your income is growing, saving for retirement may seem like a challenge at a time when you are paying or saving for expenses such as college. But many experts caution against borrowing against or dipping into retirement accounts to finance those expenses.
Mature families should generally consider adjusting their retirement accounts so a smaller portion is in high-risk, high-return investments. The closer you are to retirement, the less risk you can afford to take because you have less time to recover from downturns in the stock market. Some mutual funds have a mix of investments designed for people set to retire in a certain year.
As uncomfortable as it may be, mature married women also should start thinking about whether they will be secure in retirement if they become widowed. It’s important to know what assets you can count on as you review your retirement savings and needs.
At age 50, you can start making “catch-up” contributions to your 401(k) or other retirement accounts. It’s a way to help beef up your retirement savings as you near the end of your income-earning years. Try saving at least 20 percent of your income for retirement.
Figure on needing 70 percent of your pre-retirement annual income each year to maintain a similar standard of living -- more for lower-income families. Social Security pays only a portion of that.
One resource for figuring out your retirement needs and how to get there is a pamphlet published by the U.S. Department of Labor’s Employee Benefits Security Administration. It’s written for people within 10 years of their expected retirement. You can download the pamphlet online at www.dol.gov/ebsa/publications/NRTOC.html. The site also has other useful publications on retirement.
A good financial planner can help you sort through your retirement savings options and suggest adjustments as needed. You want to make the most of your resources. And, if you need to start saving more for retirement, you’ll want to do that sooner rather than later.
Published on September 18, 2006
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