How Late Boomers Can Still Build A Nest Egg

All may not be lost for those people who are well into their fifties and have not begun saving for retirement, but it is going to take some serious sacrifices for the next five to 10 years.  This according to a recent article in Financial Advisor Magazine (HERE). 

The article laid out ways a 55-year-old making $80,000 a year can still put aside $345,000 to $444,000 in tax-deferred savings for retirement. It is a realistic goal that can be accomplished. 

The example shows how, starting from zero dollars, a person can contribute to a 401(k) plan a maximum amount of $16,500 plus an additional $5,500 that is allowed as a “catch up” contribution each year. Based on an employer matching 3% of the of the employee’s first 6% of contribution, that saver would have $444,610 in tax-deferred savings at age 65. He will have been putting aside 27.5% of his salary for 10 years. 

In various other combinations of maximum contribution and/or maximum catch-up contribution for five or 10 years, with the standard 6% of salary matched by 3% from the employer, savers can accumulate $345,000 to $401,000, the article says.

The article talks about how people who have avoided saving until now are going to have to figure something out. Saving now still may not preclude needing a part-time job after retirement, but they won’t have to have a full time job.

Timing is everything…Some of these couples are just finishing paying for their children’s college, so that money can now go to retirement.

If you want to know if you’re on track or when you can retire – Click HERE for a FREE Financial Roadmap. You can run your own What-if scenarios.