Staying on Track
When you’re in your 40s and have already started planning for retirement, be sure you remain on course. Keep your debt down so you’ll have more money to save. Also, be sure you have a suitable investment mix in your tax-advantaged retirement savings plans.
- Review your retirement strategy
Every six months or so, reevaluate what you’ve been doing to prepare for retirement. If you changed jobs or had a major life event (such as getting divorced or having a baby), you may need to adjust your retirement plan.
- Pay down your debt
The less you owe to lenders and credit card issuers, the more you’ll have for retirement savings. The Wells Fargo Debt Pay Down Solution tool offers a simple way to help you pay down your high-interest debt.
- Don’t let those tax-deferred retirement plans slide
Maybe you skipped a year or two contributing to your 401(k) or an IRA. If so, get back in the habit of saving. As your earnings increase during your 40s, try to save more money each year. Make sure you have the right type of Individual Retirement Account and consider investing the maximum annually. To find the cash, consider using any bonuses or tax refunds you receive.
- Create a suitable investment mix
If you’re still investing your retirement portfolio the way you were in your 30s, it’s probably time for a fresh look. By utilizing a suitable asset allocation strategy and dividing your dollars among a variety of investments, you can decrease the likelihood that all the investments in your portfolio decline at the same time. Of course, by the same token, it’s also unlikely that every investment in your portfolio would go up at the same time. Bear in mind that although asset allocation can help diversify your portfolio, it does not protect against fluctuating prices or uncertain returns.
- Get your paperwork in order
Many people don’t realize how important it is to have key financial documents and to keep them updated. Ask yourself these questions: Are the beneficiaries named on your retirement accounts current? Do you have an up-to-date general durable power of attorney, medical power of attorney, a living will, and a will? Visit the Wills, Trusts, and Estate Planning area of legal-information website Nolo.com to learn more.
- Work with a financial advisor
A financial advisor can help you plot a strategy and take advantage of the best ways to save for retirement.
Catey Hill is money editor for the New York Daily News online and author of SHOO, Jimmy Choo!